Risk Score
Pending analysis
Investment Range
$163,500 - $701,100
Franchise Fee
$29,900
Total US Locations
43
Business Summary
Beard Papa's operates as a specialty dessert shop that primarily features fresh and natural cream puffs, along with a limited selection of other desserts and beverages. The franchise offers both individual unit shops and area development opportunities for opening multiple locations. Beard Papa's shops can be established as either stand-alone retail spaces or as kiosk shops within other business establishments.
Corporate History
Muginoho International, Inc., the franchisor for Beard Papa's, was established in New York on September 24, 2002. It operates the Beard Papa's Shop franchise system in the United States and several other international locations. Beard Papa's began offering franchises in the United States in December 2004. The franchisor is a wholly-owned subsidiary of DAY TO LIFE Co., Ltd., a Japanese company founded in December 1997, which owns the Beard Papa's trademarks and has sold franchises in Japan since 2000.
Financial Overview
Investment Range
$163,500 - $701,100
Franchise Fee (Low)
$29,900
Franchise Fee (High)
$45,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$67,700
Equipment Costs (High)
$269,500
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial condition of Beard Papa's, as presented in its financial statements, raises questions about its ability to provide services and support to franchisees. The company has a significant accumulated deficit, which stood at over $6.2 million at the end of 2024. While Beard Papa's reported net income in 2023 and 2024, it incurred a net loss in 2022. Additionally, the company has substantial federal and state net operating loss carryforwards and a valuation allowance to offset its deferred tax assets, indicating a history of losses. The company's cash and cash equivalents balances also exceeded FDIC insurance limits by approximately $1.1 million in 2024, which is a credit risk.
Financing Details
Beard Papa's does not offer any direct or indirect financing to its franchisees. This means that Beard Papa's will not provide loans, payment plans for initial fees, or guarantee any leases or other financial obligations for franchisees.
Performance Metrics
Total US Locations
43
Franchised Units
42
Corporate Units
1
Avg Square Footage
650
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Beard Papa's has no reportable litigation history. Item 3 of its Franchise Disclosure Document states that no litigation is required to be disclosed.
Bankruptcy History
Beard Papa's has no bankruptcy history. Item 4 of its Franchise Disclosure Document states that no bankruptcy information is required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, Beard Papa's franchisees must meet several conditions. They must comply with all terms of their Franchise Agreement, provide 180 days advance written notice of their intent to renew, and sign Beard Papa's current form of Franchise Agreement and related agreements for the new term. Franchisees must also sign a general release in favor of Beard Papa's, pay a renewal fee, and upgrade their shop to meet current brand standards. They must also have the legal right to continue occupying their shop location. Additionally, all owners must be in compliance with their agreements and personally guarantee the terms of the new agreement, which may have materially different terms from the original.
Training & Support Program
Franchisor Assistance
Beard Papa's provides various forms of assistance to its franchisees. Before opening, the franchisor helps with site review and approval, provides access to confidential operations manuals, and offers lists of approved suppliers, equipment, furniture, fixtures, and signage. Beard Papa's also identifies the franchisee's shop on its website and provides an initial training program at the franchisee's shop location for the managing owner and two managers. After opening, Beard Papa's may require and provide supplemental on-site training for additional fees. It also communicates operating standards, marketing standards, and approved vendor lists. The franchisor may also coordinate an annual system conference for franchisees.
Initial Training Hours
40
Training Location
Franchisee's shop location
Ongoing Support
After opening, Beard Papa's franchisees may be required to participate in supplemental on-site training for an additional fee, and pay a fee for initial training for any replacement operating managers. The franchisor provides ongoing consultations and communications regarding operating standards, Approved Services and Products, System Supplies, marketing, and promotion. Beard Papa's also provides updated lists of approved vendors and suppliers. Franchisees may attend an annual system conference (for a fee). Additionally, the franchisor administers a brand development fund for system-wide marketing and may establish local or regional advertising cooperatives. Beard Papa's also provides specifications for its designated computer and point-of-sale systems, with franchisees responsible for maintenance and updates.
Franchise Requirements
Ideal Candidate Profile
Beard Papa's looks for franchisees whose managing owner is personally responsible for the management and overall supervision of the shop. While hands-on daily management is recommended, franchisees may hire an operating manager who meets the franchisor's standards, completes initial training, and signs a confidentiality agreement. Franchisees are also expected to maintain sufficient working capital.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Beard Papa's will designate a territory around the approved shop location, typically a distance of two to five miles in all directions reachable by road. However, the size of the designated territory can be smaller based on factors like population density, demographics, and geographical boundaries. For locations in non-traditional or captive markets such as shopping malls, airports, or universities, the designated territory may be limited to the physical boundaries of that specific facility.
Staffing Notes
Beard Papa's franchisees are solely responsible for hiring, managing, and supervising their employees. The franchisor does not provide assistance with employee hiring or training. Franchisees must ensure all employees wear approved uniforms with System branded apparel and adhere to System standards for preparing, maintaining, and serving Approved Services and Products. The managing owner is personally responsible for overall shop supervision, and for multiple shops, each must have an on-site operating manager.