If Beggars Pizza assigns the franchise agreement, who is responsible for the franchisor's obligations?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
That (a) (i) the transferee (and if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) enters into a written assignment, in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's obligations under the Agreement, or (ii) the transferee executes, for a term ending on the expiration date of the Agreement and with such renewal terms as may be provided by the Agreement, Franchisor's then-current form of franchise agreement and other ancillary agreements as Franchisor may require for the Restaurant, which agreements will supersede the Agreement in all respects, and the terms of which may differ from the terms of the Agreement including, without limitation, a higher royalty fee and advertising contribution and a smaller or modified Franchisee's Territory, except that transferee will not be required to pay any initial franchise fee, and (b) the transferee or its principals guarantee the performance of all such obligations in writing in a form satisfactory to Franchisor;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
Based on the 2025 Beggars Pizza Franchise Disclosure Document, if Beggars Pizza assigns the franchise agreement, the transferee (the party to whom the agreement is assigned) will be responsible for discharging all of the franchisee's obligations under the agreement. The transferee must enter into a written assignment, agreeing to fulfill these obligations in a form satisfactory to Beggars Pizza. Alternatively, the transferee can execute Beggars Pizza's then-current form of franchise agreement, which would supersede the original agreement.
This requirement ensures that the new party taking over the franchise agreement is legally bound to uphold the commitments and responsibilities outlined in the original agreement. Beggars Pizza maintains control over who assumes these obligations, safeguarding the brand's standards and interests.
Furthermore, Beggars Pizza may require the transferee or its principals to guarantee the performance of all such obligations in writing, in a form satisfactory to Beggars Pizza. This guarantee provides an additional layer of security for Beggars Pizza, ensuring that there is a responsible party fully committed to fulfilling the franchisee's obligations. This is a fairly standard practice in franchising, as franchisors want to ensure that any new franchisee or assignee meets their operational and financial standards.