What agreement must all Principal Owners of a Batteries Plus Bulbs franchisee sign?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. Guaranty. All Principal Owners of a Franchisee which is a corporation, partnership or other entity, will sign the Guaranty and Assumption Agreement in the form attached to this Agreement as Exhibit E (the "Guaranty Agreement"). Any person or entity that at any time after the date of this Agreement becomes a Principal Owner of Franchisee under the provisions of this Section 15 or otherwise will, as a condition of becoming a Principal Owner, sign the Guaranty Agreement. Franchisee will furnish to Franchisor at any time upon reasonable request a certified copy of the Articles of Incorporation or Articles of Organization and a list, in a form Franchisor reasonably requires, of all shareholders or members of record and all persons having a beneficial interest in any corporation or other entity that is or becomes a Franchisee.
Source: Item 22 — Contracts (FDD page 80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, all Principal Owners of a franchisee that is a corporation, partnership, or other entity must sign a Guaranty and Assumption Agreement. This agreement is included as Exhibit E to the Franchise Agreement, referred to as the "Guaranty Agreement." Furthermore, any person or entity that becomes a Principal Owner after the initial agreement date is also required to sign the Guaranty Agreement as a condition of becoming a Principal Owner.
This requirement ensures that individuals with a significant ownership stake in the franchisee business are personally liable for the franchisee's obligations to Batteries Plus Bulbs. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and commitment from those who control the franchisee entity.
Batteries Plus Bulbs also requires the franchisee to provide a certified copy of the Articles of Incorporation or Articles of Organization, along with a list of all shareholders or members of record and all persons having a beneficial interest in any corporation or other entity that is or becomes a franchisee. This allows Batteries Plus Bulbs to maintain an accurate record of ownership and ensure compliance with the Guaranty Agreement requirement. Prospective franchisees should carefully review the Guaranty Agreement (Exhibit E) to understand the full scope of their personal obligations and liabilities.