Is the personal guaranty for B Bops considered revocable or irrevocable?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 B Bops's 2025 Franchise Disclosure Document, the personal guaranty associated with the Multiple-Unit Development Agreement is explicitly stated to be continuing and irrevocable. This means that individuals who sign the guaranty are bound to its terms for the duration of the agreement, and cannot unilaterally withdraw or cancel their obligations. This commitment extends to their heirs, legal representatives, and assigns.
Specifically, the personal guarantors agree to be personally bound by all terms, provisions, and conditions of the Multiple-Unit Development Agreement. They also guarantee the full and prompt payment of any indebtedness of the developer arising from the agreement. This includes monetary obligations, as well as the responsibility to take or refrain from specific actions or activities as outlined in the agreement. The guarantors are also bound by the nondisclosure and noncompete covenants within the agreement.
This irrevocable nature of the guaranty has significant implications for potential B Bops developers. It signifies a long-term, unwavering commitment to the financial and operational success of the developed units. The guarantors' liability is primary, meaning B Bops is not required to pursue remedies against the developer before seeking fulfillment from the guarantors. Furthermore, the guaranty remains in effect regardless of any extensions of time, credit, or other allowances B Bops may grant to the developer.
Prospective B Bops franchisees considering a Multiple-Unit Development Agreement should carefully evaluate the implications of this irrevocable personal guaranty. They should seek legal counsel to fully understand the scope of their obligations and potential liabilities. This includes assessing their financial capacity to cover any potential debts or breaches of the agreement, as well as their willingness to adhere to the non-compete and confidentiality clauses. The comprehensive and enduring nature of the guaranty underscores the importance of thorough due diligence before entering into such an agreement with B Bops.