Until what date does the management fee agreement between Beggars Pizza and Begcom, LLC expire?

According to Beggars Pizza's 2025 Franchise Disclosure Document, the management fee agreement between Beggars Pizza and Begcom, LLC, a related party through common ownership, is set to expire on December 31, 2028.

For a prospective franchisee, this indicates that Beggars Pizza has a formal, ongoing business relationship with Begcom, LLC, for management services. It is important to note that Begcom, LLC is a related party through common ownership. This arrangement could have implications for the franchisee, as the franchisor's financial obligations and dealings with related parties could affect the overall financial health and stability of the franchise system. Understanding the nature and extent of these related-party transactions is crucial for assessing the potential risks and benefits of investing in a Beggars Pizza franchise.

The FDD also discloses the management fees paid to Begcom, LLC for the years ended December 31, 2023, and 2022, which totaled $579,820 and $666,106, respectively. Additionally, the management fees due to Begcom, LLC as of December 31, 2023, and 2022, were $10,010 and $9,166, respectively, and are included in accounts payable on the balance sheet. These figures provide insight into the financial magnitude of the relationship between Beggars Pizza and Begcom, LLC.

Prospective franchisees should carefully review the financial statements and related disclosures in the FDD to fully understand the terms of the management fee agreement and the potential impact of related-party transactions on the franchise system. It would be prudent to seek clarification from Beggars Pizza regarding the specific services provided by Begcom, LLC, the rationale for using a related party, and the measures in place to ensure fair pricing and prevent conflicts of interest.