Must the principals of a transferee of a Beggars Pizza franchise guarantee the performance of obligations in writing?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.3.5 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)
According to Beggars Pizza's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner (transferee), Beggars Pizza may require the transferee's principals to guarantee the performance of all obligations in writing. This guarantee must be in a form that is satisfactory to Beggars Pizza.
This requirement is one of several conditions that Beggars Pizza may impose, at its sole discretion, for approving a franchise transfer. Other conditions include ensuring that the current franchisee has met all monetary and other obligations to Beggars Pizza and its affiliates, and that the franchisee is not in default of any agreements. Beggars Pizza also assesses whether the payment terms offered by the proposed transferee are reasonable based on the restaurant's gross revenues and the sale prices of other Beggars Pizza restaurants.
For a prospective franchisee, this means that if they plan to sell their Beggars Pizza franchise in the future, the new owner's principals may need to provide a written guarantee. This requirement aims to protect Beggars Pizza's interests by ensuring that the new ownership is fully committed to fulfilling the franchise obligations. The franchisor has the right to determine the specific form and content of this guarantee.