Beard Papas
Beard Papas offers specialty dessert shops featuring fresh cream puffs in the U.S., known for their natural ingredients and sweet treats, operating as stand-alone or kiosk locations.
Beard Papas franchise FAQ
How much does it cost to open one — the total initial investment?
The estimated initial investment for developing one Beard Papa's Shop ranges from $163,500 to $477,000. This estimate includes the initial franchise fee of $45,000 and other costs as detailed in Tables A and B of Item 7 [p.25].
What is the initial franchise fee?
The initial franchise fee is $45,000 [p.11], unless you sign a Multi-Unit Development Agreement, in which case it may be discounted [p.11]. This fee is separate from and in addition to the Development Area Fee for the first development shop [p.231].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a monthly payment equal to 5% of the franchisee's Gross Sales [p.130, p.15]. Additionally, the franchisee must contribute up to 2% of their monthly Gross Sales to the Brand Development Fund for various marketing and operational improvements [p.35].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from the franchisor. The franchisor may refuse to approve a transfer for good cause, which includes but is not limited to unspecified criteria. Additionally, the proposed transferee must meet certain standards regarding moral character, business experience, financial resources, and cannot own or operate a competitive business [p.246; p.153]. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.249]. Additionally, the franchisor may change its business model without consent, which could require additional investments or harm the franchise business [p.3]. However, under Virginia law, termination without reasonable cause is unlawful [p.251], and good cause for termination includes failure to comply with lawful provisions of the agreement [p.251(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific financial requirement details such as net worth or liquid capital needed for qualification. However, it does mention that if the franchisor's most recent financial statements are unaudited and show a net worth of less than $100,000, you may request escrow arrangements for your initial investment until certain obligations are fulfilled [p.246].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory, but your Designated Territory is protected during the term of the Franchise Agreement, provided you comply with your obligations. This protection means that the franchisor will not establish another Beard Papa's Shop within your Designated Territory unless you are in default or if it involves their Reserved Rights. [p.39]
What training and ongoing support does the franchisor provide?
The franchisor provides an initial Training Program that includes both classroom and on-the-job instruction, which can also be conducted remotely through online web-based conferencing. Following this, the franchisee is responsible for providing ongoing training to employees, staff, and other personnel at their shop location or as determined by the franchisor. Additionally, the franchisor may offer supplemental training upon approval, with a fee of $800 per trainer per day for a minimum of two days, plus travel and accommodation expenses if applicable [p.128].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information based on actual records of an existing outlet you are considering buying. Otherwise, they do not make representations about a franchisee's future financial performance or the past performance of company-owned or franchised outlets [p.52]. If you receive any other financial performance information or projections, you should report it to specified contacts [p.52].
What am I restricted to selling, and where must I buy supplies?
You are required to exclusively offer and serve the Approved Services and Products as per the System's standards and specifications [p.138(2)]. Additionally, you must purchase and use System Supplies from the franchisor or its designated suppliers [p.138(2)(c)], and also buy other materials, ingredients, goods, and supplies including, but not limited to, System Supplies, exclusively from distributors and other suppliers approved by the franchisor [p.138(2)(e)].