Can Beggars Pizza require the transferee to assume all of the franchisee's obligations under the agreement?
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 the 2025 Beggars Pizza Franchise Disclosure Document, Beggars Pizza has the right to require a transferee to assume all of the franchisee's obligations under the existing franchise agreement. Specifically, Beggars Pizza may require that the transferee enter into a written agreement, satisfactory to Beggars Pizza, assuming and agreeing to fulfill all of the franchisee's obligations.
Alternatively, Beggars Pizza can require the transferee to execute Beggars Pizza's then-current form of franchise agreement. This new agreement would run for a term ending on the original agreement's expiration date, including any renewal terms. This new agreement would supersede the original in all respects and its terms may differ from the original agreement. These differences could include higher royalty fees and advertising contributions, as well as a smaller or modified territory. However, the transferee will not be required to pay an initial franchise fee.
Beggars Pizza can also require that the transferee or its principals guarantee the performance of all obligations in writing, in a form satisfactory to Beggars Pizza. This ensures that Beggars Pizza has recourse should the transferee fail to meet the obligations under the franchise agreement. These conditions provide Beggars Pizza with flexibility in ensuring that any new franchisee meets their standards and obligations, while also allowing for updates to the franchise agreement to reflect current business practices.