What activities are prohibited for those who sign the Personal Covenant and Guarantee for a Bath Tune Up franchise?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
PERSONAL COVENANT AND GUARANTEE
(To be signed by franchisee's spouse, if any, and by all owners, if franchisee is a company.)
In return for the signing by Franchisor of this Franchise Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the undersigned covenant and agree as follows:
- A. The undersigned represent to Franchisor that the undersigned are all of the people having direct or indirect "Control" (as defined in the Franchise Agreement) or a direct or indirect beneficial ownership interest in Franchisee.
- B. The undersigned, individually and jointly, will (i) comply with and be bound by all provisions of the Franchise Agreement to the same extent as if each of them were the Franchisee, and (ii) not engage in any activities not permitted to the Franchisee under the Franchise Agreement (whether in their own behalf or in any capacity on behalf of any entity).
- C. Any controversy or claim arising out of this Personal Covenant and Guarantee, or any breach of it, will be submitted to mediation and arbitration in accordance with Section 11 of the Franchise Agreement.
- D. If any other people obtain direct or indirect Control of Franchisee or a direct or indirect beneficial interest in Franchisee, the undersigned will cause those people to sign and deliver to Franchisor a counterpart of this Personal Covenant and Guarantee.
- E. This Personal Covenant and Guarantee will be governed in accordance with the laws of the same state whose laws govern the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, individuals who sign the Personal Covenant and Guarantee agree to be bound by all the provisions of the Franchise Agreement as if they were the franchisee. This means they cannot engage in any activities that are not permitted to the franchisee under the Franchise Agreement, whether on their own behalf or for any other entity. This covenant applies to the franchisee's spouse (if any) and all owners if the franchisee is a company.
This Personal Covenant and Guarantee ensures that all parties with control or ownership in the Bath Tune Up franchise are held responsible for adhering to the terms of the Franchise Agreement. It aims to prevent individuals from circumventing the agreement by acting through other entities or on their own while still benefiting from the franchise. The agreement also stipulates that any disputes arising from the Personal Covenant and Guarantee will be resolved through mediation and arbitration, as outlined in the Franchise Agreement.
Furthermore, if new individuals gain control or ownership in the Bath Tune Up franchise, the existing signatories of the Personal Covenant and Guarantee are responsible for ensuring that these new individuals also sign and deliver a counterpart of the guarantee to the franchisor. This maintains consistent accountability as the ownership structure evolves. The Personal Covenant and Guarantee is governed by the same state laws that govern the Franchise Agreement, providing legal consistency.
In essence, the Personal Covenant and Guarantee is a critical tool for Bath Tune Up to ensure compliance and protect its interests by extending the obligations of the Franchise Agreement to all controlling parties and beneficial owners of the franchise.