What is the effect of an assignment of the Beggars Pizza Franchise Agreement on the survival of certain provisions?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.3.5 That (a) (i) the transferee (and if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) enters into a written assignment, in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's obligations under the Agreement, or (ii) the transferee executes, for a term ending on the expiration date of the Agreement and with such renewal terms as may be provided by the Agreement, Franchisor's then-current form of franchise agreement and other ancillary agreements as Franchisor may require for the Restaurant, which agreements will supersede the Agreement in all respects, and the terms of which may differ from the terms of the Agreement including, without limitation, a higher royalty fee and advertising contribution and a smaller or modified Franchisee's Territory, except that transferee will not be required to pay any initial franchise fee, and (b) the transferee or its principals guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, when a franchise agreement is transferred, the incoming franchisee may be subject to the current franchise agreement or a new agreement. Specifically, Beggars Pizza may require the transferee to either assume all of the obligations under the existing agreement or execute the then-current form of the franchise agreement.
If the transferee assumes the existing agreement, they step into the shoes of the original franchisee and are bound by the original terms and conditions for the remainder of the term. Alternatively, Beggars Pizza can require the transferee to sign a new franchise agreement.
If a new agreement is required, the terms may differ from the original agreement. These differences could include higher royalty fees, increased advertising contributions, or a smaller or modified territory. However, the transferee will not be required to pay an initial franchise fee. The transferee or its principals must also guarantee the performance of all obligations in writing in a form satisfactory to Beggars Pizza.