What rights does Beggars Pizza have if a franchisee fails to assign the lease after termination?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor does not elect to exercise its option to acquire the lease or sublease for the Premises, Franchisee must make such modifications or alterations to the premises immediately upon termination or expiration of the Agreement as may be necessary to distinguish the appearance of the premises from that of the Restaurant under the System, and must make such specific additional changes thereto as Franchisor may reasonably request for that purpose. If Franchisee fails or refuses to comply with the requirements of this Section 16.4, Franchisor will have the right to enter upon the premises
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, upon termination of the franchise agreement, franchisees may be required to assign their lease for the premises to Beggars Pizza, at Beggars Pizza's option. If Beggars Pizza does not want to acquire the lease, the franchisee must modify the premises to differentiate its appearance from a Beggars Pizza restaurant.
If the franchisee fails to either assign the lease or modify the premises as required, Beggars Pizza has the right to enter the premises. This provision gives Beggars Pizza significant control over the location even after a franchise agreement ends, ensuring that a former franchisee cannot continue to operate a similar business that might confuse customers or damage the Beggars Pizza brand.
This requirement is fairly standard in the franchise industry, as franchisors typically want to protect their brand identity and prevent former franchisees from directly competing using the same location. Prospective franchisees should carefully consider the potential costs associated with modifying the premises if Beggars Pizza chooses not to take over the lease, as these costs could be substantial.