What are 'Ancillary Agreements' in the context of the personal guaranty for a Bang Cookies franchise?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
(l) Franchisee, an Owner, and/or a Spouse, as applicable and whether individually or jointly, breaches or is in default of an Ancillary Agreement, and, if the applicable agreement provides for the opportunity to cure, fails to timely cure the breach or default of the Ancillary Agreement, including, without limitation, the Franchise Owner and Spouse Agreement and Guaranty;
(3) Franchisee, each Owner, and each Spouse must not be in default or material breach of this Agreement or the Ancillary Agreements;
(2) All accrued monetary obligations of Franchisee and all other outstanding obligations to Franchisor and/or Franchisor's affiliates under this Agreement and the Ancillary Agreements must be satisfied in a timely manner, and Franchisee must satisfy all trade, supplier, and vendor accounts
You agree that: (a) your direct and immediate liability under this guaranty shall be joint and several with Franchisee and all other signatories to this Agreement; (b) you will render any payment required under the Franchise Agreement and the Ancillary Agreements upon demand if Franchisee fails or refuses punctually to do so; (c) your liability shall not be contingent or conditioned upon pursuit by us of any remedies against Franchisee or any other person; and (d) liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence that we may grant to Franchisee or to any other person, including the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend this guarantee, which shall be continuing and irrevocable during the term of each of the Franchise Agreement and the Ancillary Agreements and following the termination, expiration or Transfer of each of the Franchise Agreement and the Ancillary Agreements to the extent any financial obligations under any such Franchise Agreement and Ancillary Agreements survive such termination, expiration or Transfer.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to the 2024 Bang Cookies Franchise Disclosure Document, 'Ancillary Agreements' are referenced within the context of both franchise transfers and the personal guaranty. When a Bang Cookies franchisee seeks to transfer their franchise, compliance with both the Franchise Agreement and any Ancillary Agreements is required for approval. Specifically, the franchisee, each owner, and their spouses must not be in default or material breach of these agreements. Furthermore, all outstanding obligations to Bang Cookies under the Franchise Agreement and Ancillary Agreements must be satisfied before the transfer can proceed.
The personal guaranty stipulates that the guarantor is liable for the franchisee's obligations under both the Franchise Agreement and any Ancillary Agreements. This liability extends to ensuring payments are made if the franchisee fails to do so, and it is not contingent upon Bang Cookies pursuing other remedies against the franchisee. The guarantor's liability remains in effect even after termination, expiration, or transfer of the Franchise Agreement and Ancillary Agreements, to the extent that financial obligations survive.
Additionally, a franchisee, owner, or spouse can be in default if they breach an Ancillary Agreement, which could lead to termination of the franchise if the breach is not cured. The Franchise Owner and Spouse Agreement and Guaranty is specifically mentioned as an example of an Ancillary Agreement. Therefore, prospective Bang Cookies franchisees and their guarantors should carefully review all agreements to understand their obligations and potential liabilities.