What is the purpose of the Commissary Agreement that Beggars Pizza must enter into with Begcom?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
7.4.3.1 Franchisee must enter into Begcom's then-current commissary agreement ("Commissary Agreement") for the purchase of products designated by Franchisor for purchase from Begcom during the term hereof, and must make payment to Begcom as required thereunder.
7.4.3.2 If Franchisee fails to make any payment in full to Franchisor, its designee, or Begcom for any reason when due under the Agreement, the Commissary Agreement, or otherwise, Franchisor and Begcom may, among other remedies, (a) suspend or refuse shipment to Franchisee of additional products until such payment has been made, and (b) require payment for any or all future shipments of products to be made on a cash-on-delivery basis.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the Commissary Agreement between the franchisee and Begcom LLC is for the purchase of designated products. Specifically, franchisees must enter into Begcom's current commissary agreement for purchasing products that Beggars Pizza designates from Begcom during the term of the franchise agreement. Franchisees are also obligated to make payments to Begcom as required under this agreement.
This agreement ensures that franchisees source certain essential items from a designated supplier, Begcom, to maintain uniform quality and image. Beggars Pizza has developed proprietary and confidential recipes, including pizza dough, sauces, sausage, and spice blends, and sells these products through Begcom or other designated suppliers. The FDD specifies that Begcom is the designated supplier for additional food items and supplies, such as cheeses, sausages, and paper products, some of which bear Beggars Pizza's proprietary marks.
Failure to adhere to the Commissary Agreement can result in penalties. If a franchisee fails to make payments to Beggars Pizza, its designee, or Begcom, both Beggars Pizza and Begcom have the right to suspend or refuse further product shipments until payment is made. They can also require that future shipments be paid on a cash-on-delivery basis. This underscores the importance of maintaining good financial standing with Begcom to ensure a consistent supply of necessary products for operating the Beggars Pizza franchise.