Is the Beggars Pizza franchisor responsible if the approved site is not suitable for the restaurant?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ations and warranties in this Section 26.4 incorrect.
- 26.5 Site Approval. Franchisee hereby acknowledges and agrees that Franchisor's approval of a site does not constitute an express or implied assurance, representation, or warranty of any kind of the suitability of the site for the Restaurant or any other purpose. Franchisor's approval of a site indicates only that Franchisor believes the site complies with acceptable minimum criteria established by Franchisor solely for its purposes as of the time of the evaluation. Both Franchisee and Franchisor acknowledge that application of criteria that may have been
effective with respect to other sites and premises may not be predictive of potential for all sites and that, subsequent to Franchisor's approval of a site, demographic, and/or economic factors, such as competition from other similar businesses, included in or excluded from Franchisor's criteria could change, thereby altering the potential of a site or lease. Such factors are unpredictable and are beyond Franchisor's control. Franchisor will not be responsible for the failure of a site approved by Franchisee to meet Franchisee's expectations as to revenue or operational criteria. Franchisee further acknowledges and agrees that its acceptance of a franchise for the operation of the Restaurant at the site is based on its own independent investigation of the suitability of the site.
26.6 No Waiver.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisor is not responsible if a site approved by both the franchisor and franchisee fails to meet the franchisee's expectations regarding revenue or operational criteria. The franchisor's approval only indicates that the site meets the minimum criteria established by Beggars Pizza at the time of evaluation.
The FDD emphasizes that demographic and economic factors can change after the site approval, which are unpredictable and beyond the franchisor's control. These factors, such as competition, can alter the potential of the site. Therefore, Beggars Pizza does not guarantee the suitability of the site for the restaurant or any other purpose.
The document makes it clear that the franchisee is responsible for conducting their own independent investigation to determine the suitability of the site. The franchisee's acceptance of the franchise at the approved location is based on this independent assessment, shifting the onus of due diligence onto the franchisee. This is a common practice in franchising, where franchisees are expected to perform their own market research and feasibility studies.