At what value will Beggars Pizza purchase the supplies and inventory of the restaurant after termination?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination or expiration of the Agreement, all rights granted hereunder to Franchisee will forthwith terminate, and:
- 16.1 Cease Operations. Franchisee must immediately cease to operate the Restaurant, and will not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of Franchisor. Immediately upon the expiration or termination hereof, Franchisee must dispose of, and not sell, any proprietary or trade secret products sold hereunder including, without limitation, any products bearing the Proprietary Marks or contained in packaging bearing the Proprietary Marks.
- 16.2 Cease Use of Confidential Information and Marks. Franchisee must immediately and permanently cease to use, in any manner whatsoever, any confidential methods, procedures and techniques associated with the System; any Confidential Information; the Proprietary Mark "Beggars Pizza®" and all other Proprietary Marks and distinctive forms, slogans, signs, symbols, and devices associated with the System. In particular, Franchisee must cease to use, without limitation, all signs, advertising materials, displays, stationery, forms, products, and any other articles which display the Proprietary Marks.
- 16.3 Cancellation of Registrations. Franchisee must take such action as may be necessary to cancel any assumed name registration or equivalent registration obtained by Franchisee which contains the mark "Beggars Pizza®" or any other Proprietary Marks, and Franchisee must furnish Franchisor with evidence satisfactory to Franchisor of compliance with this obligation within five (5) days after termination or expiration of the Agreement.
- 16.4 Assignment of Lease. Franchisee must, at Franchisor's option, assign to Franchisor any interest which Franchisee has in any lease or sublease for the Premises. 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)
Based on the 2025 Beggars Pizza Franchise Disclosure Document, the document does not specify the exact value or method that Beggars Pizza will use to purchase the supplies and inventory of the restaurant after termination. The contract outlines obligations of the franchisee upon termination or expiration of the agreement, including ceasing operations and use of confidential information, but it does not detail any obligation for Beggars Pizza to purchase supplies or inventory.
For a prospective franchisee, this means that there are no guaranteed buy-back terms for supplies and inventory upon termination. This could result in a financial loss if the franchisee has a significant amount of unsold inventory at the time of termination, as they may be required to dispose of products bearing Beggars Pizza's proprietary marks without compensation.
Therefore, it is crucial for a potential Beggars Pizza franchisee to discuss the terms of inventory and supply buy-back with the franchisor before signing the agreement. Understanding the conditions under which the franchisor might purchase these items, and at what price, is an important aspect of assessing the overall financial risk and potential losses associated with the franchise.