What are the requirements for selling, assigning, or transferring the B Bops franchise or any ownership interest in the franchisee according to the Personal Guaranty?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 those who have signed the guaranty agree not to sell, assign, or otherwise permit or cause a transfer of the B Bops franchise or any ownership interest in the franchisee without complying with the requirements of the Franchise Agreement. This means that anyone who has provided a personal guarantee for the franchisee's obligations must adhere to the transfer conditions outlined in the agreement.
Specifically, the Franchise Agreement states that the rights and duties within the agreement are personal to the franchisee and its owners. Therefore, neither the agreement nor the franchise (or any interest therein), nor any controlling ownership interest in the franchisee, can be directly or indirectly transferred to another entity without prior written approval from B Bops. Any transfer that violates these terms will be considered void and will not grant any rights to a third party.
B Bops will not unreasonably withhold consent to a transfer request, provided the transfer complies with all applicable requirements. If the franchisee is an individual and wants to transfer the franchise to a business entity like a partnership, corporation, or LLC, B Bops's consent will not be unreasonably withheld if certain conditions are met. These conditions include the entity meeting specific requirements for entity ownership, the franchisee owning a majority of the equity and voting interests in the entity, the franchisee serving as the entity's principal executive, all outstanding financial obligations to B Bops being satisfied, and the entity agreeing in writing to assume all of the franchisee's obligations under the agreement. Even with such a transfer, the original franchisee remains liable for all obligations under the agreement.