What does the Personal Guaranty require the undersigned to guarantee regarding the franchisee's indebtedness to B Bops?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
tegral part.
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- 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.
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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 Franchisee 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 Franchisee; (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 Franchisee; and (e) that they, and each of them, hereby waive notice of acceptance, demand, protest, nonperformance and of any other notices.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the Personal Guaranty stipulates that the undersigned, typically partners, shareholders, or members of the franchisee, must guarantee the franchisee's financial obligations to B Bops. Specifically, the undersigned unconditionally guarantee full and prompt payment to B Bops or its affiliates for any indebtedness the franchisee incurs. This indebtedness must arise under the Franchise Agreement or any other agreement between the franchisee and B Bops related to the franchise.
This means that if the B Bops franchisee fails to pay any amounts owed to B Bops, such as royalties, advertising fees, or other charges, the personal guarantors are liable for those debts. This obligation is joint, individual, and several, meaning each guarantor is fully responsible for the entire debt, regardless of the involvement of other guarantors. The guaranty is continuing and irrevocable, meaning it remains in effect throughout the term of the Franchise Agreement, and the guarantors cannot revoke it.
Furthermore, the personal guarantors are obligated to make any payment or performance required under the Franchise Agreement immediately upon demand if the franchisee fails to do so. B Bops is not required to pursue or exhaust any remedies against the franchisee before seeking payment from the guarantors. The liability of the guarantors will not be waived or diminished by any extensions of time, credit, or other indulgences that B Bops may grant to the franchisee. The guarantors also waive any notice of acceptance, demand, protest, nonperformance, or any other notices related to the franchisee's obligations.
For a prospective B Bops franchisee, this signifies a significant personal financial risk. Before signing the Personal Guaranty, individuals should carefully consider their financial situation and their confidence in the franchisee's ability to manage the business successfully. It is advisable to seek legal and financial counsel to fully understand the implications of providing a personal guarantee, as it could expose personal assets to the risk of seizure in the event of the franchisee's default.