If Beggars Pizza treats the agreement as continuing on a month-to-month basis after expiration, what happens to the franchisee's obligations?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee continues to accept the benefits of the Agreement after the expiration of the term without satisfying the renewal conditions described in Section 2.2, then Franchisor, at its option and in its sole discretion, may treat the Agreement as either: (a) expired as of the date of expiration, meaning that Franchisee is operating without a license and in violation of Franchisor's rights; or (b) continuing on a month-to-month basis (each month an "Interim Period").
In the latter case, all of Franchisee's obligations will remain in full force and effect during each Interim Period as if the Agreement had not expired, but either Franchisor or Franchisee may terminate the Agreement for convenience upon thirty (30) days advance written notice to the other party.
No Interim Period creates any new franchise rights, and, upon expiration of the final Interim Period, Franchisee will be bound by, inter alia, all obligations of the Agreement which by their terms or by reasonable implication, in whole or in part, arise upon, or are to be performed after, expiration, termination, or transfer of the Agreement, including, without limitation, those contained in Sections 10, 16, and 17 hereof.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, if a franchisee continues to operate after the franchise term expires without meeting the renewal conditions, Beggars Pizza has the option to treat the agreement as either expired or continuing on a month-to-month basis, referred to as an "Interim Period."
If Beggars Pizza chooses to treat the agreement as continuing on a month-to-month basis, all of the franchisee's obligations remain in full force and effect during each Interim Period, as if the agreement had not expired. This means the franchisee must continue to adhere to all the terms and conditions of the original franchise agreement, including operational standards, payment of royalties and advertising fees, and use of Beggars Pizza's proprietary marks and systems.
However, either Beggars Pizza or the franchisee can terminate the agreement for convenience with a 30-day advance written notice to the other party during this Interim Period. It is important to note that no Interim Period creates any new franchise rights, and upon the expiration of the final Interim Period, the franchisee will still be bound by obligations that arise after the expiration or termination of the agreement, such as those related to confidentiality and post-termination obligations.