If the Bath Tune Up franchisee is a company, who must sign the Personal Covenant and Guarantee?
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 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISED BUSINESS (FDD page 37)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, if the franchisee is a company, all owners must sign the Personal Covenant and Guarantee. This requirement ensures that individuals with a stake in the company are personally responsible for upholding the terms of the franchise agreement.
The Personal Covenant and Guarantee stipulates that the signatories represent they are all the people having direct or indirect "Control" or beneficial ownership interest in the franchisee company. By signing, these individuals agree to comply with all provisions of the Franchise Agreement as if they were the franchisee themselves and to not engage in any activities not permitted to the franchisee.
This guarantee also extends to future changes in ownership. If new individuals gain control or a beneficial interest in the franchisee company, the existing signatories are responsible for ensuring these new individuals also sign and deliver a counterpart of the Personal Covenant and Guarantee to Bath Tune Up. This provision maintains a consistent level of personal accountability throughout the term of the franchise agreement.
Any disputes arising from the Personal Covenant and Guarantee will be subject to mediation and arbitration, as outlined in the franchise agreement. This ensures a structured process for resolving conflicts related to the guarantee. This requirement is fairly standard in franchising, as franchisors want to ensure the business owners are personally invested in the success and compliance of the franchise.