What happens if a guaranty of the Bambu Franchise Agreement fails to be a continuing obligation?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
- t. Inadequate Guaranties. Any guaranty of this Agreement fails to be a continuing obligation fully enforceable against the guarantor signing the guaranty, or there is any inadequacy of the guaranty or guarantor and the guarantor is unable to provide adequate assurances as required by Bambu.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, if any guaranty of the Franchise Agreement fails to be a continuing obligation fully enforceable against the guarantor, or there is any inadequacy of the guaranty or guarantor, and the guarantor cannot provide adequate assurances as required by Bambu, it constitutes a breach of the agreement.
Specifically, this situation falls under the events that can trigger a default under the agreement. If such a default occurs, Bambu has the right to terminate the agreement.
This means that the franchisee could lose their franchise if the guaranty is not maintained, or if the guarantor's financial situation changes and they cannot provide adequate assurances to Bambu. It is important for prospective franchisees to ensure that their guarantors understand their obligations and have the financial capacity to meet them throughout the term of the franchise agreement.