Which item in the Beggars Pizza Disclosure Document discusses the franchisee's obligation for territorial development and sales quotas?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 12: TERRITORY]
During the term of your Franchise Agreement, we will not open or operate, or license others to own or operate, a Beggars Pizza® Restaurant in your Territory except as provided in this Item 12. We reserve all rights inside and outside the Territory except those we expressly grant in your Franchise Agreement including the exclusive, unrestricted right, in our sole and absolute discretion, to directly or indirectly (a) establish and operate, and license others to establish and operate, a Beggars Pizza® Restaurant under the System and the Proprietary Marks at any location outside of your Territory, (b) accept delivery orders and deliver, and allow other franchisees to accept delivery orders and deliver, any products (including products sold at the Restaurant) in your Territory, (c) establish and operate, and license other parties to establish and operate, Beggars Pizza® Restaurants under the System and Proprietary Marks in your Territory at any existing or future (i) shopping malls, (ii) airports, (iii) bus and train depots and other transportation terminals, (iv) entertainment facilities (including sports stadiums) and theme parks, and (v) rest stops, plazas and similar locations accessible from limited access highways, (d) sell or distribute, or license others to sell or distribute, products that are the same as or similar to those offered under the System, and any other products or services at any location other than at a Beggars Pizza® Restaurant (regardless of proximity to the Restaurant) whether within or outside of your Territory under the same or different Proprietary Marks including sales made at supermarkets, convenience stores, markets, and grocery stores, and over the Internet and/or other on-line networks and other communications methods, (e) acquire and operate any business of any kind under different proprietary marks at any location (regardless of proximity to the Restaurant) whether located within or outside of your Territory, and (f) acquire, merge with, or otherwise affiliate with, and then own and operate, and franchise or license others to own and operate, any business of any kind including any business that offers products similar to those offered under the System or that uses the Proprietary Marks or any other system or marks within or outside of your Territory. We have no current plans to operate a business under a different trademark that will provide goods and
services similar to those that you offer; however, we may do so in the future. We are not required to compensate you for soliciting or accepting orders from customers in your Territory.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 18–19)
What This Means (2025 FDD)
Based on the 2025 Beggars Pizza Franchise Disclosure Document, Item 12 outlines the territory granted to the franchisee and the franchisor's rights within and outside that territory. Specifically, it details Beggars Pizza's rights to establish other outlets or alternative distribution channels, even within a franchisee's territory. This section defines the scope of the franchisee's exclusive rights and the exceptions to those rights.
According to Item 12, Beggars Pizza retains significant rights within and outside the franchisee's territory. These rights include establishing and operating Beggars Pizza restaurants outside the franchisee's territory, accepting delivery orders within the franchisee's territory, and establishing Beggars Pizza restaurants in specific locations like shopping malls, airports, and entertainment facilities, even if they are within the franchisee's territory. Additionally, Beggars Pizza can sell products similar to those offered at Beggars Pizza restaurants through other channels like supermarkets and online platforms, regardless of their location relative to the franchisee's territory.
Item 12 also states that Beggars Pizza is not obligated to compensate franchisees for soliciting or accepting orders from customers within their territory. This means that while a franchisee may have a designated territory, Beggars Pizza can still engage in activities that might draw customers from that area without providing any financial compensation to the franchisee. This aspect of the agreement is important for prospective franchisees to consider, as it clarifies the limitations of their territorial exclusivity and the potential for competition from the franchisor itself.
While Item 12 specifies the territorial rights and limitations, the excerpt does not explicitly mention the franchisee's obligation for territorial development or sales quotas. A prospective franchisee should review the Franchise Agreement (Exhibit C) for specific obligations related to developing the territory and meeting sales targets. It would be prudent to ask the franchisor directly about any expectations or requirements related to territorial development and sales quotas to fully understand the franchisee's responsibilities.