In the B Bops personal guaranty, what specific actions or activities are the undersigned obligated to take or refrain from taking?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- In consideration of the development rights granted to Developer hereunder and in order to induce Company to grant such development rights to Developer, 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 of any indebtedness of Developer arising under or by virtue of this Agreement; (c) that they, and each of them, will not sell, assign or otherwise permit or cause a transfer of the development rights or any partnership or stock interest in Developer without complying with the requirements of Section 13 of the Agreement; (d) that they, and each of them, shall be personally bound by the nondisclosure and noncompete covenants of 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 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the personal guaranty outlines several obligations for the undersigned individuals (partners or shareholders of the developer) under the Multiple-Unit Development Agreement. These individuals are bound by all terms, provisions, and conditions of the agreement. They guarantee full and prompt payment of any debt the developer owes to B Bops. They must also adhere to the non-disclosure and non-compete clauses within the agreement.
Specifically, the personal guaranty states that the undersigned cannot sell, assign, or transfer development rights or any partnership/stock interest in the developer without complying with Section 13 of the agreement. This prevents unauthorized transfers of the franchise rights. Furthermore, the individuals are personally liable for any breach of the agreement, which includes both monetary obligations and the responsibility to take or avoid specific actions. This ensures that B Bops has recourse directly against the personal assets of the owners, not just the developer entity, for failures to comply with the agreement.
In practical terms, this means that if the developer entity fails to pay its debts or violates the agreement in any way, B Bops can seek compensation directly from the personal guarantors. The personal guarantors also agree to be bound by the non-compete clause, preventing them from engaging in a similar business during and for a period after the agreement. This is a significant commitment, as it ties the personal assets and future business activities of the guarantors to the success and adherence to the B Bops franchise agreement. The guaranty is continuing and irrevocable, meaning these obligations persist throughout the term of the agreement.