What obligations of the franchisee does the Guaranty and Assumption of Franchisee's Obligations cover for Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of the above Franchise Agreement (the "Agreement") by BAMBU FRANCHISING LLC ("Bambu"), each of the undersigned hereby personally and unconditionally:
Guarantees to Bambu and its successors and assigns, for the term of this Agreement, including successor franchise terms, that the franchisee as that term is defined in the Agreement (the "Franchisee") shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and
Agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, including but not limited to, the terms of the articles and sections pertaining to noncompetition during and after the term, confidentiality and the Marks and copyrighted works of Bambu.
Each of the undersigned waives the following:
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- Acceptance and notice of acceptance by Bambu of the foregoing undertaking;
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- Notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
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- Protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
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- Any right he or she may have to require that any action be brought against Franchisee or any other person as a condition of liability; and
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- Any and all other notices and legal or equitable defenses to which he or she may be entitled.
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Franchisee's Obligations ensures that the franchisee will fulfill all obligations outlined in the Franchise Agreement. This means a guarantor is personally guaranteeing that the Bambu franchisee will adhere to every agreement and covenant detailed within the Franchise Agreement for the entire term, including any successor terms.
This guarantee extends to being personally bound by and liable for any breaches of the agreement. This includes, but isn't limited to, terms related to non-competition during and after the franchise term, maintaining confidentiality, and protecting Bambu's trademarks and copyrighted materials. The guarantor essentially steps into the shoes of the franchisee, taking on the responsibility to ensure full compliance with the Franchise Agreement.
The guarantor also waives several rights, including the right to receive notice of acceptance of the guarantee by Bambu, notice of demand for payment or nonperformance, and any requirement that Bambu first pursue action against the franchisee before seeking recourse from the guarantor. This waiver strengthens Bambu's position by streamlining the process of enforcing the Franchise Agreement.
For a prospective Bambu franchisee, this means that someone (often a principal in the franchisee's business entity) must be willing to personally guarantee the franchisee's performance. This is a significant commitment, as the guarantor's personal assets could be at risk if the franchisee fails to meet its obligations under the Franchise Agreement. Franchisees should carefully consider the implications of this requirement and ensure that the guarantor fully understands the scope of the obligations being guaranteed.