Does Bath Tune Up require a separate personal guaranty to obtain financing?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
If you meet our credit standards, we will, at your request, provide financing as shown below.
To obtain financing, you must sign a Secured Promissory Note and General Security Agreement substantially in the form of Exhibits J and K to this disclosure document. No separate personal guaranty is required to obtain financing. Payments begin with the first royalty due date. The note can be prepaid without penalty at any time during its term. The General Security Agreement grants us a security interest in substantially all of your assets to secure your payments under the Secured Promissory Note. You waive your right to notice of a collection action and to assert any defenses to collection against us.
Source: Item 10 — FINANCING (FDD pages 26–27)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, a separate personal guaranty is not required to obtain financing from the franchisor. To secure financing, a franchisee must sign a Secured Promissory Note and General Security Agreement, which are substantially in the forms of Exhibits J and K of the FDD. Payments begin on the first royalty due date, and the note can be prepaid without penalty at any time during its term.
The General Security Agreement grants Bath Tune Up a security interest in substantially all of the franchisee's assets to secure payments under the Secured Promissory Note. Additionally, the franchisee waives their right to notice of a collection action and to assert any defenses against Bath Tune Up.
While a personal guarantee is not required to obtain financing from Bath Tune Up, Schedule 1 of the Franchise Agreement addresses personal guaranties of agreements, as outlined in Items 15 and 22 of the FDD. This suggests that personal guarantees may be required in other contexts related to the franchise agreement, even if not for the specific financing described in Item 10. It is important for prospective franchisees to carefully review the franchise agreement and related exhibits to understand the full scope of any personal guarantee obligations.