If the B Bops franchisee is an entity, who must sign the franchise agreement?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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PERSONAL GUARANTY
The undersigned persons hereby represent to B-BOP'S FRANCHISING CORP. ("Company") that they are partners, shareholders or members of the franchisee ("Franchisee") entering into the within and foregoing Franchise Agreement (the "Agreement"), of which this Personal Guaranty shall be deemed an integral part.
In consideration of the Franchise granted to Franchisee hereunder and in order to induce Company to grant such Franchise to Franchisee, 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 or its affiliates of any indebtedness of Franchisee arising under or by virtue of this Agreement or any other agreement between the parties relating to the Franchise granted under this Agreement; (c) that they, and each of them, will not sell, assign or otherwise permit or cause a transfer of the Franchise or any ownership interest in Franchisee without complying with the requirements of this Agreement; (d) that they, and each of them, shall be personally bound by the nondisclosure and noncompete covenants set forth in 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 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, if the franchisee is a partnership, corporation, or limited liability company, certain individuals associated with the franchisee must personally guarantee the franchise agreement. Specifically, the partners, shareholders, or members of the franchisee entity must sign a personal guaranty, binding them to the terms of the agreement.
This personal guaranty means that these individuals are not only agreeing to uphold the franchise agreement on behalf of the entity but are also personally liable for the entity's obligations. This includes financial obligations, adherence to non-disclosure and non-compete covenants, and any actions required or prohibited by the agreement. The individuals are responsible jointly, individually, and severally, meaning B Bops can pursue any one or all of them for the full amount of any debt or breach.
For a prospective B Bops franchisee, this requirement has significant implications. Before forming an entity to operate the franchise, potential franchisees should understand that they cannot shield themselves completely from personal liability. They should carefully consider the financial and operational risks of the franchise and ensure that all partners, shareholders, or members are fully aware of and willing to accept the personal obligations involved. This personal guarantee remains in effect even if ownership changes occur within the franchisee entity, so it's crucial to maintain compliance with the franchise agreement throughout its term.