What specific items must a Beggars Pizza franchisee purchase from Beggars Pizza, an affiliate, or a designated supplier?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
ole discretion.
You must purchase all spaghetti sauces, pizza sauce spices, cheeses, sausages, pizza dough, spice blends, and paper products used at the Restaurant from us, an affiliate, or a supplier we designate or approve. We have developed certain proprietary, confidential, and trade secret recipes that are part of the System including pizza dough, spaghetti and pizza sauces, sausage, and secret spice blends. We may develop additional trade secret food ingredients. We sell these products through Begcom or other designated suppliers. In addition, Begcom is the designated supplier of certain additional food items and supplies, some of which bear the Proprietary Marks, and we may specify certain other parties as designated suppliers for specified products, materials, supplies, paper goods, fixtures, furnishings, and equipment used or sold at the Restaurant. You must purchase such items from Begcom or the other designated suppliers to assure the uniform quality and image associated with the System and the Restaurant. You must only use revolving baking ovens we designate or approve in the Restaurant.
We are not required to make our standards and specifications for formulas available to prospective suppliers, including the recipes or ingredients for proprietary or trade secret products that we, in our sole discretion, consider confidential.
You must enter into Begcom's form of commissary agreement (the "Commissary Agreement") for the purchase of products we designate for purchase from Begcom during the term of your Franchise Agreement. You must make payment to Begcom as required under the Commissary Agreement. The current Commissary Agreement is attached as Exhibit D to this disclosure document.
If you fail to make any payment in full to us, our designee, or Begcom when due under your Franchise Agreement, your Commissary Agreement, or any other agreement for any reason, we and Begcom may, among other remedies, (a) suspend or refuse shipment to you of additional products until full payment has been made, and/or (b) require payment for all future shipments of products to be made on a cash-on-delivery basis.
We derived no revenues during our fiscal year ending December 31, 2024, from required franchisee purchases. In the year ending December 31, 2024, Begcom derived approximately $6,398,528 in revenue from the sale of approved products to our franchisees and our affiliateowned Beggars Pizza® Restaurants. Beg Adv, Inc. derived approximately $252,148 in rebates or commissions from required franchisee purchases and affiliate-owned Beggars Pizza® Restaurant
purchases from our designated and approved suppliers; specifically, it received rebates for purchases of sodas (approximately $3.00 per gallon), food and paper products (flat fee ranging from approximately $1.00 to $7.00), meat and other pizza toppings ($0.10 per pound), and pizza sauce ($1.00 to $1.50 per case). All rebates, including those generated by affiliate-owned locations, were contributed to the Brand Fund operated by Beg Adv, Inc. and described in Item 11. Laurance Garetto and Cheryl Garetto own an interest in Begcom.
All advertising (including Internet advertising) must meet our specifications as set forth in the Manuals. You must submit to all proposed advertising to us for our approval before use. You may not use any advertising not prepared or previously approved by us within the preceding six months.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 15–18)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, franchisees are required to purchase specific items from Beggars Pizza, its affiliates, or designated suppliers. These mandatory purchases include all spaghetti sauces, pizza sauce spices, cheeses, sausages, pizza dough, spice blends, and paper products used at the Restaurant. Beggars Pizza maintains that these requirements are in place to ensure the uniform quality and image associated with the Beggars Pizza system and restaurants.
Beggars Pizza has developed proprietary, confidential, and trade secret recipes for certain key ingredients, including pizza dough, spaghetti and pizza sauces, sausage, and secret spice blends. These proprietary items are sold through Begcom or other designated suppliers. Begcom is also the designated supplier of certain additional food items and supplies, some of which bear the Proprietary Marks. The FDD indicates that Beggars Pizza may specify certain other parties as designated suppliers for specified products, materials, supplies, paper goods, fixtures, furnishings, and equipment used or sold at the Restaurant.
The franchisee is obligated to enter into Begcom's form of commissary agreement for the purchase of products designated for purchase from Begcom during the term of the Franchise Agreement and must make payments as required under this agreement. Beggars Pizza estimates that 95% of a franchisee's expenditures for leases and purchases in establishing the Restaurant and on an ongoing basis will be for goods and services that are subject to sourcing restrictions. This means suppliers must be approved by Beggars Pizza or meet their standards or specifications.
If a franchisee wishes to purchase products from a non-approved supplier, they must submit a written request to Beggars Pizza for approval, providing evidence of conformity with Beggars Pizza's specifications. The franchisee is responsible for covering the costs of evaluation and testing of the proposed supplier. Beggars Pizza will attempt to notify the franchisee of their decision within 30 days of receiving the request; failure to respond within 30 days results in the supplier being deemed unapproved. Beggars Pizza retains the right to revoke approval of particular products or suppliers if they no longer meet the company's standards.