Who does B Bops require to execute the Guaranty?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The undersigned persons hereby represent to B-Bop's Franchising Corp. ("Company") that they are partners or shareholders of the developer ("Developer") entering into the within and foregoing Multiple-Unit Development Agreement (the "Agreement"), of which this Personal Guaranty shall be deemed an integral part.
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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' 2025 Franchise Disclosure Document, the Personal Guaranty of Obligations under the Multiple-Unit Development Agreement must be executed by the partners or shareholders of the developer. These individuals represent to B Bops Franchising Corp. that they are partners or shareholders of the developer entering into the Multiple-Unit Development Agreement.
By signing the guaranty, these individuals agree to be personally bound by all terms, provisions, and conditions of the Agreement. They also guarantee the full and prompt payment of any indebtedness of the Developer arising under the Agreement. Furthermore, they agree not to sell, assign, or transfer development rights or any partnership or stock interest in the Developer without complying with Section 13 of the Agreement. The partners or shareholders are also bound by the nondisclosure and noncompete covenants within the agreement.
This personal guaranty ensures that B Bops has recourse to the personal assets of the Developer's partners or shareholders should the Developer fail to meet its obligations. This is a common practice in franchising, especially in multiple-unit development agreements, as it provides an additional layer of security for the franchisor. The individuals signing the guaranty are essentially taking on the financial risk of the development project alongside the Developer entity.