What are the payment obligations of Beggars Pizza under the Commissary Agreement?
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 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
The 2025 Beggars Pizza Franchise Disclosure Document (FDD) mentions a Commissary Agreement between the franchisee and Begcom LLC, an affiliate of Beggars Pizza. While the FDD does not explicitly detail the payment obligations outlined in the Commissary Agreement, it does state that the franchisee's principals must guarantee that all obligations under both the Franchise Agreement and the Commissary Agreement will be punctually paid and performed. This guarantee extends to all monetary obligations required of the franchisee by Begcom LLC under the Commissary Agreement.
This arrangement means that if a franchisee fails to meet their payment obligations to Begcom LLC as specified in the Commissary Agreement, the franchisee's principals (Guarantors) are legally bound to cover those payments. Beggars Pizza and Begcom LLC can demand immediate payment from the Guarantors without first pursuing the franchisee. The Guarantors also waive any right to require Beggars Pizza or Begcom LLC to proceed against the franchisee or exhaust any security from the franchisee before seeking payment from them.
Furthermore, the Guarantors are responsible for defending, indemnifying, and holding Beggars Pizza and Begcom LLC harmless against any losses, damages, liabilities, costs, and expenses, including attorney's fees, arising from the franchisee's failure to perform any obligation under the Commissary Agreement. This includes any amendments to the agreement or other related agreements.
To fully understand the payment obligations, a prospective franchisee should carefully review the full Commissary Agreement (Exhibit D, as referenced in the FDD) and seek clarification from Beggars Pizza regarding all payment terms, schedules, and potential fees associated with the agreement.