Can a Beggars Pizza franchisee transfer their franchise during the initial term?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
rminate that | | | | other agreement. |
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| i. Franchisee's obligations on termination/non-renewal | 16. | You must (a) stop operating the Restaurant, dispose of any proprietary products, and cease holding yourself out as a present or former Beggars Pizza® franchisee, (b) stop using the System, all confidential information, and the Proprietary Marks, (c) cancel all assumed names containing the Proprietary Marks, (d) offer us the option to purchase or assume the lease for the Restaurant, (e) assign all telephone numbers to us that you used in connection with the operation of the Restaurant, (f) refrain from infringing on the Proprietary Marks, (f) pay all sums owing to us and our affiliates, (g) pay us liquidated damages, (h) return the Manuals and all other confidential information to us, (i) cancel or assign to us all Internet domain names, URLs, and Internet sites containing or reflecting the Proprietary Marks, (j) offer us the option to purchase the Restaurant's assets, and (k) comply with non-competition and confidentiality covenants. |
| j. Assignment of contract by franchisor | 14.1. | We may transfer or assign your Franchise Agreement or any part of its rights or obligations to any party. Any designated assignee will become solely responsible for all our obligations under your Franchise Agreement from the date of assignment. |
| k. "Transfer" by franchisee – defined | 14.2. | A "transfer" is when you sell, assign, transfer, convey, pledge, encumber, merge, or give away any direct or indirect interest in your Franchise Agreement, yourself, or all or substantially all of the assets of the Restaurant. |
| l. Franchisor approval | 14.2. | Transfers require our prior written consent. |
| of transfer by franchisee | ||
| m. Conditions for franchisor approval of transfer | 14.3. | Conditions include: (a) you have satisfied all monetary obligations under your Franchise Agreement, (b) you are not in default of your Franchise Agreement or any other agreement, (c) the payment terms offered by the transferee are not excessive or unreasonable, (d) you and your owners sign a general release, (e) the transferee signs our then-current form of Franchise Agreement, (f) the transferee is approved by us as a franchisee, (g) you remain liable for all accrued obligations to us, (h) the transferee completes any training programs we require, and (i) you pay us a transfer fee. |
| n. Franchisor's right of first refusal to acquire franchisee's business | 14.5. | We may match any offer for your business by a third party. |
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| o. Franchisor's option to purchase franchisee's business | 16.4, 16.5, and 16.11. | We may require you to assign your lease and/or telephone numbers to us upon the termination or expiration of your Franchise Agreement. We have the option to purchase the assets of the Restaurant from you within 30 days of the termination or expiration of your Franchise Agreement including your equipment, furnishings, and signage. |
| p. Death or disability of franchisee | 14.6. | Upon the death or physical or mental incapacity of any person with an interest in your Franchise Agreement, you, or all or substantially all of the assets of the Restaurant, the executor, administrator, or personal representative of such person must transfer the interest to a third party approved by us within six months subject to the same conditions as any other transfer. |
| q. Non-competition covenants during the term of the franchise | 17.2. | You may not own or have any interest in any business that offers pizza, pizza products, Italian-style food, or other similar food items during the term of your Franchise Agreement. |
| r. Non-competition covenants after the franchise is terminated or expires | 17.3. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 31–35)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, a franchisee can transfer their franchise during the initial term, which is ten years according to Section 2.1. However, this transfer is not unconditional. Section 14.2 specifies that any transfer requires Beggars Pizza's prior written consent.
According to Section 14.2, a "transfer" includes selling, assigning, conveying, pledging, encumbering, merging, or giving away any direct or indirect interest in the Franchise Agreement, the franchisee themselves, or substantially all of the restaurant's assets. This broad definition means any significant change in ownership or control is considered a transfer subject to Beggars Pizza's approval.
Section 14.3 outlines several conditions that must be met for Beggars Pizza to approve a transfer. These include satisfying all monetary obligations, not being in default of the Franchise Agreement, ensuring the transferee's payment terms are reasonable, obtaining a general release from the franchisee and their owners, having the transferee sign the then-current Franchise Agreement, securing Beggars Pizza's approval of the transferee as a franchisee, maintaining the franchisee's liability for accrued obligations, ensuring the transferee completes required training programs, and paying a transfer fee.
Additionally, Section 14.5 states that Beggars Pizza has the right of first refusal to match any offer made by a third party for the franchisee's business. This means that before a franchisee can accept an offer from someone else, Beggars Pizza has the option to purchase the franchise on the same terms. These stipulations are fairly standard in franchising, as they allow the franchisor to maintain control over who joins their system and to ensure that any new franchisee meets their standards and obligations.