Are the nondisclosure and noncompete covenants in the B Bops Franchise Agreement personally binding under the Personal Guaranty?

According to B Bops's 2025 Franchise Disclosure Document, the Personal Guaranty included in the Franchise Agreement explicitly states that those signing the guaranty are personally bound by the nondisclosure and noncompete covenants within the agreement. This means that if the franchisee is a corporation, LLC, or other legal entity, the individuals signing the Personal Guaranty (typically owners or shareholders) agree to be held individually responsible for upholding these specific covenants. This obligation is in addition to the franchisee entity's responsibility.

This has significant implications for prospective B Bops franchisees. The individuals signing the Personal Guaranty must understand that they cannot circumvent the nondisclosure and noncompete clauses by operating through a corporate entity. Their personal assets and future business activities could be at risk if the B Bops franchise violates these covenants. The non-disclosure agreement ensures franchisees do not reveal confidential information about B Bops's operations. The non-compete agreement ensures franchisees do not open a competing restaurant concept near a B Bops location during or for a period after the franchise term.

It is common practice in franchising for franchisors to require a personal guaranty, especially from smaller or newer business entities. This provides an added layer of security for B Bops, ensuring that there are individuals with personal assets at stake who are motivated to comply with the terms of the Franchise Agreement. Prospective franchisees should carefully review the nondisclosure and noncompete clauses, as well as the Personal Guaranty, with legal counsel to fully understand the scope of their obligations and potential liabilities.

Therefore, individuals considering a B Bops franchise should be fully aware that the nondisclosure and noncompete covenants are not only binding on the franchisee entity but also personally binding on those who sign the Personal Guaranty. This personal obligation continues even if the franchisee's business structure changes or the franchise is sold, unless B Bops releases the guarantor from their obligations in writing.