What is the effect of the Personal Guaranty on the Multiple-Unit Development Agreement for B Bops?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The undersigned persons hereby represent to B-Bop's Franchising Corp. ("Company") that they are partners or shareholders of the developer ("Developer") entering into the within and foregoing Multiple-Unit Development Agreement (the "Agreement"), of which this Personal Guaranty shall be deemed an integral part.
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- 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.
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- Each of the undersigned further agree as follows: (a) that this Guaranty shall be continuing and irrevocable; (b) that they, and each of them, shall render any payment or performance required under this Agreement upon demand if Developer fails or refuses promptly to do so; (c) such liability shall be primary and shall not be contingent upon Company pursuing or exhausting any remedies against Developer; (d) such liability shall not be waived, diminished or otherwise affected by any extension of time, credit or other indulgence which Company may from time to time grant to Developer; and (e) that they, and each of them, hereby waive notice of acceptance, demand, protest, nonperformance and of any other notices.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to the 2025 B Bops Franchise Disclosure Document, the Personal Guaranty of Obligations under the Multiple-Unit Development Agreement ensures that specific individuals (partners or shareholders of the developer) are held personally responsible for the developer's obligations. This guaranty is an integral part of the Multiple-Unit Development Agreement. By signing the guaranty, these individuals agree to be bound by all terms, provisions, and conditions of the agreement. They also guarantee the full and prompt payment of any debt the developer owes to B Bops.
Furthermore, the individuals guaranteeing the agreement cannot sell or transfer their development rights or any interest in the developer without complying with Section 13 of the agreement. They are also personally bound by the nondisclosure and noncompete covenants included in the agreement. This means they are liable for any breaches of the agreement, including monetary obligations and obligations to take or not take specific actions.
The personal guaranty is continuing and irrevocable, meaning the guarantors' obligations persist. If the developer fails to make a payment or perform as required, the guarantors must do so upon demand. B Bops is not required to pursue the developer for remedies before seeking fulfillment from the guarantors. The liability of the guarantors is not waived or diminished by any extensions of time or credit that B Bops may grant to the developer, and the guarantors waive any notices of acceptance, demand, protest, or nonperformance.