Must all accrued monetary obligations to Beggars Pizza be satisfied before a transfer can be approved?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may require any or all of the following as conditions of its approval in its sole discretion:
14.3.1 That all of Franchisee's accrued monetary obligations and all other outstanding obligations to Franchisor and its affiliates have been satisfied;
14.3.2 That Franchisee is not in default of any provision of the Agreement, any amendment hereof or successor hereto, or any other agreement between Franchisee and Franchisor or its affiliates;
14.3.3 That the consideration or payment terms offered by a proposed transferee are not excessive or unreasonable, based on the gross revenues of the Restaurant and sale prices of other Beggars Pizza® restaurants in the System in Franchisor's reasonable business judgment;
14.3.4 That the transferor executes a general release, in a form satisfactory to Franchisor, of any claims against Franchisor and its affiliates, and their respective officers, directors, agents, shareholders, and employees;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisor may require that all accrued monetary obligations be satisfied before approving a franchise transfer. This means that if a franchisee owes any money to Beggars Pizza or its affiliates, such as unpaid royalties, marketing fees, or supply purchases, these debts must be settled before the transfer can proceed.
This requirement protects Beggars Pizza by ensuring that the franchise is not transferred with outstanding debts. It also ensures that the new franchisee starts with a clean financial slate. For a franchisee looking to sell their business, this highlights the importance of staying current on all payments to Beggars Pizza. Failure to do so could delay or even prevent the transfer of the franchise.
Beyond settling monetary obligations, Beggars Pizza may also require that the franchisee is not in default of any provision of the Franchise Agreement or any other agreement with Beggars Pizza or its affiliates. The franchisor may also assess whether the terms offered by a proposed transferee are reasonable based on the restaurant's gross revenues and sale prices of other Beggars Pizza restaurants. The transferor may also be required to execute a general release of any claims against Beggars Pizza. These conditions are all within Beggars Pizza's discretion.