Does Beggars Pizza offer guarantees to franchisees?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
As an inducement to Beggars Pizza Franchise, LLC ("Franchisor") to execute the Beggars Pizza Franchise, LLC Franchise Agreement between Franchisor and ("Franchisee") dated , 20 (the "Franchise Agreement"), the undersigned ("Guarantors"), jointly and severally hereby unconditionally guarantee to Franchisor and its successors and assigns that all of Franchisee's obligations under the Franchise Agreement and the Commissary Agreement between Begcom LLC ("Begcom") and Franchisee (collectively, the "Agreements") will be punctually paid and performed. Upon demand by Franchisor, Guarantors must immediately make each payment to Franchisor and Begcom required of Franchisee under the Agreements. Guarantor waives any right to require Franchisor or Begcom to (a) proceed against Franchisee for any payment required under the Agreements, (b) proceed against or exhaust any security from Franchisee, or (c) pursue or exhaust any remedy including, without limitation, any legal or equitable relief against Franchisee. Without affecting the obligations of Guarantors under this Guarantee, Franchisor or Begcom may extend, modify, or release any indebtedness or obligation of Franchisee or settle, adjust, or compromise any claims against Franchisee without notice to Guarantors. Guarantors waive notice of amendment of the Agreements and notice of demand for payment by Franchisee. Guarantors will be bound by any such amendments and changes to the Agreements.
Guarantors must defend, indemnify, and hold Franchisor and Begcom harmless against any losses, damages, liabilities, costs, and expenses including, without limitation, reasonable attorneys' fees, reasonable costs of investigation, court costs, and arbitration fees and expenses resulting from, consisting of, or arising out of or in connection with any failure by Franchisee to perform any obligation of Franchisee under the Agreements, any amendments thereto, or any other agreements executed by Franchisee in connection with the Agreements.
Source: Item 10 — FINANCING (FDD page 19)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, Beggars Pizza does not offer guarantees to franchisees in the typical sense of guaranteeing success or a certain level of profit. However, the document includes a "GUARANTEE, INDEMNIFICATION, AND ACKNOWLEDGMENT" agreement that specifies the obligations of the franchisee's principals and their spouses. This agreement ensures that the franchisee's obligations under the Franchise Agreement and the Commissary Agreement are met.
Specifically, the principals and spouses of the franchisee must unconditionally guarantee that all financial and performance obligations of the franchisee are fulfilled. If the franchisee fails to make payments or perform as required, the guarantors are obligated to immediately make those payments or fulfill those obligations upon demand by Beggars Pizza. The guarantors also waive any right to require Beggars Pizza to first pursue the franchisee or exhaust any security from the franchisee before seeking recourse from the guarantors.
Furthermore, the guarantors must defend, indemnify, and hold Beggars Pizza harmless from any losses, damages, liabilities, costs, and expenses, including attorney's fees, arising from the franchisee's failure to perform their obligations under the agreements. This arrangement protects Beggars Pizza from financial and legal repercussions resulting from a franchisee's non-compliance, but it does not provide any guarantee of success or financial return for the franchisee. Instead, it places a significant responsibility on the franchisee's principals to ensure the franchisee's adherence to the franchise and commissary agreements.