Is Beggars Pizza Franchisor a third-party beneficiary of the agreement?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisor is a third-party beneficiary of the Agreement and may enforce it solely and/or jointly with Franchisee. I am aware that my violation of the Agreement will cause Franchisor and Franchisee irreparable harm. I acknowledge and agree that Franchisor and/or Franchisee may apply for the issuance of an injunction preventing me from violating the Agreement in addition to any other remedies they may have at law or in equity. I will pay Franchisor and Franchisee all costs incurred including, without limitation, attorneys' fees, if the Agreement is enforced against me. Due to the importance of the Agreement to Franchisor and Franchisee, any claim I have against Franchisor or Franchisee is a separate matter and does not entitle me to violate, or justify any violation of, the Agreement. If any part of the Agreement is held invalid by a court or agency having valid jurisdiction, the rest of the Agreement is still enforceable, and the part held invalid is enforceable to the extent found reasonable by the court or agency. I agree that all the words and phrases used in the Agreement will have the same meaning as used in the Franchise Agreement and that such meanings have been explained to me.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 36–39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisor is indeed a third-party beneficiary of the Confidentiality and Non-Competition Agreement. This means that Beggars Pizza has specific rights and can enforce the agreement, even though they are not a direct party to the agreement between the franchisee and their employees.
This is significant for a prospective Beggars Pizza franchisee because it means that Beggars Pizza can take legal action against a franchisee's manager or other personnel who violate the Confidentiality and Non-Competition Agreement. The agreement is designed to protect Beggars Pizza's confidential information and system, and the franchisor has the right to ensure that these are not compromised by those with access to sensitive information.
The agreement states that any violation of it will cause irreparable harm to both the franchisor and the franchisee. It also specifies that both Beggars Pizza and the franchisee can seek an injunction to prevent violations, in addition to any other legal remedies. Furthermore, the employee is responsible for covering all costs, including attorney's fees, if the agreement is enforced against them. This clause reinforces the importance of the agreement and the serious consequences of its violation.
This arrangement is fairly common in franchising, as franchisors often want to ensure that their brand standards, trade secrets, and customer relationships are protected, even at the level of the franchisee's employees. By being a third-party beneficiary, Beggars Pizza maintains greater control over its system and can act directly to protect its interests.