If Beggars Pizza assigns the Franchise Agreement, who becomes responsible for Beggars Pizza's obligations?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
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, specifically Item 17, if Beggars Pizza assigns the Franchise Agreement, the designated assignee becomes solely responsible for all of Beggars Pizza's obligations under the Franchise Agreement from the date of the assignment. This means that Beggars Pizza can transfer its rights and responsibilities to another party.
For a prospective franchisee, this clause is important because it clarifies that Beggars Pizza can sell or transfer the franchise agreement to a new entity. The new entity then steps into Beggars Pizza's shoes, assuming all of Beggars Pizza's responsibilities and obligations to the franchisee from that point forward.
This transfer does not require the franchisee's approval. While this is a standard clause in many franchise agreements, franchisees should carefully consider the implications of dealing with a potentially unknown or less experienced entity should Beggars Pizza choose to assign the agreement. It is essential to evaluate the financial stability and reputation of Beggars Pizza to assess the likelihood of such a transfer and its potential impact.