Is a Beggars Pizza franchisee required to purchase items from designated suppliers?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must purchase all spaghetti sauces, pizza sauce spices, cheeses, sausages, pizza dough, spice blends, and paper products used at the Restaurant from us, an affiliate, or a supplier we designate or approve. We have developed certain proprietary, confidential, and trade secret recipes that are part of the System including pizza dough, spaghetti and pizza sauces, sausage, and secret spice blends. We may develop additional trade secret food ingredients. We sell these products through Begcom or other designated suppliers. In addition, Begcom is the designated supplier of certain additional food items and supplies, some of which bear the Proprietary Marks, and we may specify certain other parties as designated suppliers for specified products, materials, supplies, paper goods, fixtures, furnishings, and equipment used or sold at the Restaurant. You must purchase such items from Begcom or the other designated suppliers to assure the uniform quality and image associated with the System and the Restaurant. You must only use revolving baking ovens we designate or approve in the Restaurant.
We are not required to make our standards and specifications for formulas available to prospective suppliers, including the recipes or ingredients for proprietary or trade secret products that we, in our sole discretion, consider confidential.
You must enter into Begcom's form of commissary agreement (the "Commissary Agreement") for the purchase of products we designate for purchase from Begcom during the term of your Franchise Agreement. You must make payment to Begcom as required under the Commissary Agreement. The current Commissary Agreement is attached as Exhibit D to this disclosure document.
If you fail to make any payment in full to us, our designee, or Begcom when due under your Franchise Agreement, your Commissary Agreement, or any other agreement for any reason, we and Begcom may, among other remedies, (a) suspend or refuse shipment to you of additional products until full payment has been made, and/or (b) require payment for all future shipments of products to be made on a cash-on-delivery basis.
We derived no revenues during our fiscal year ending December 31, 2024, from required franchisee purchases. In the year ending December 31, 2024, Begcom derived approximately $6,398,528 in revenue from the sale of approved products to our franchisees and our affiliateowned Beggars Pizza® Restaurants. Beg Adv, Inc. derived approximately $252,148 in rebates or commissions from required franchisee purchases and affiliate-owned Beggars Pizza® Restaurant
purchases from our designated and approved suppliers;
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 30–31)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, franchisees are generally required to purchase certain items from Beggars Pizza, its affiliates, or designated suppliers. Specifically, franchisees must purchase all spaghetti sauces, pizza sauce spices, cheeses, sausages, pizza dough, spice blends, and paper products from Beggars Pizza, an affiliate, or a designated or approved supplier. Beggars Pizza has developed proprietary recipes for items like pizza dough, spaghetti and pizza sauces, sausage, and secret spice blends, which are essential to the operation of the restaurant. These products are sold through Begcom or other designated suppliers.
Begcom is the designated supplier for additional food items and supplies, some of which bear proprietary marks. Beggars Pizza may also specify other parties as designated suppliers for specified products, materials, supplies, paper goods, fixtures, furnishings, and equipment. Franchisees must purchase these items from Begcom or other designated suppliers to ensure uniform quality and image. Franchisees are also required to use only revolving baking ovens designated or approved by Beggars Pizza.
The FDD also states that franchisees must enter into Begcom's form of commissary agreement for the purchase of products designated for purchase from Begcom during the term of the Franchise Agreement and make payments as required under the Commissary Agreement. If a franchisee fails to make payments to Beggars Pizza, its designee, or Begcom, Beggars Pizza and Begcom may suspend or refuse shipment of additional products until full payment is made or require cash-on-delivery for future shipments.
In 2024, Begcom derived approximately $6,398,528 in revenue from the sale of approved products to Beggars Pizza franchisees and affiliate-owned restaurants. Beg Adv, Inc. derived approximately $252,148 in rebates or commissions from required franchisee purchases and affiliate-owned Beggars Pizza restaurant purchases from designated and approved suppliers, including rebates for sodas, food and paper products, meat and pizza toppings, and pizza sauce. All rebates were contributed to the Brand Fund operated by Beg Adv, Inc.