Are the non-disclosure and non-compete covenants in the B Bops Franchise Agreement binding on the undersigned persons?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the non-disclosure and non-compete covenants within the Franchise Agreement are binding on the undersigned persons. Specifically, those signing the Personal Guaranty, who are partners, shareholders, or members of the franchisee, agree to be personally bound by these covenants. This means that these individuals are legally obligated to uphold the confidentiality and non-competition terms outlined in the agreement.
This obligation is part of the consideration for B Bops granting the franchise. By signing the Personal Guaranty, these individuals induce B Bops to award the franchise to their entity. This personal guarantee extends to full and prompt payment of any debts the franchisee owes to B Bops or its affiliates, and it prevents the sale, assignment, or transfer of the franchise without complying with the agreement's requirements.
Furthermore, these individuals are personally liable for any breaches of the Franchise Agreement, including both monetary obligations and the obligation to take or refrain from specific actions. This ensures that B Bops has recourse directly against the individuals with an ownership stake in the franchisee entity, not just the entity itself, for upholding the terms of the agreement.