What development rights granted to the Developer are being considered in the B Bops personal guaranty?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the development rights granted to Developer hereunder and in order to induce Company to grant such development rights to Developer, each of the undersigned hereby agrees, jointly, individually and severally, for themselves, their heirs, legal representatives and assigns as follows: (a) that they, and each of them, shall be personally bound by and agree to perform all of the terms, provisions and conditions of this Agreement; (b) that they, and each of them, do hereby personally and unconditionally guarantee full and prompt payment to Company of any indebtedness of Developer arising under or by virtue of this Agreement; (c) that they, and each of them, will not sell, assign or otherwise permit or cause a transfer of the development rights or any partnership or stock interest in Developer without complying with the requirements of Section 13 of the Agreement; (d) that they, and each of them, shall be personally bound by the nondisclosure and noncompete covenants of this Agreement; and (e) that they, and each of them, shall be personally liable for the breach of any provision of this Agreement, including both monetary obligations and any obligation to take or refrain from taking specific actions or activities.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the personal guaranty is tied to the development rights granted to the Developer under the Multiple-Unit Development Agreement. The personal guarantors, who are partners or shareholders of the Developer, agree to be personally bound by the terms of the agreement in consideration of these development rights. This means they are guaranteeing the Developer's obligations.
The development rights induce B Bops to grant the Developer the ability to develop B Bops restaurants. The personal guarantors agree to be personally bound by all terms, provisions, and conditions of the Development Agreement. They also guarantee the full and prompt payment of any indebtedness of the Developer to B Bops arising from the Development Agreement.
Furthermore, the personal guarantors agree not to sell, assign, or transfer the development rights or any ownership interest in the Developer without complying with Section 13 of the Development Agreement. They are also personally bound by the nondisclosure and noncompete covenants within the Development Agreement. This ensures that the individuals behind the Developer are fully committed to fulfilling the obligations and protecting B Bops's interests, as their personal assets are at stake.