What obligations are Bb.Q Chicken Franchisee's Principals individually bound by when signing the Franchise Agreement?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, certain parties are characterized as Franchisee's Principals (referred to in this Disclosure Document as "your Principals"). The Franchise Agreement is signed by us, by you, and by your Principals. By signing the Franchise Agreement, your Principals agree to be individually bound by certain obligations in the Franchise Agreement, including covenants concerning confidentiality and non-competition, and to personally guarantee your performance under the Franchise Agreement. Depending on the type of business activities in which you or your Principals may be involved, we may require your Principals to sign additional confidentiality and non-competition agreements.
Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 10–13)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the Franchise Agreement is signed by Bb.Q Chicken, the franchisee, and the franchisee's Principals. By signing this agreement, the Principals agree to be individually bound by certain obligations. These obligations include covenants concerning confidentiality and non-competition. Additionally, the Principals personally guarantee the franchisee's performance under the Franchise Agreement.
In practical terms, this means that if you are considering a Bb.Q Chicken franchise and your business structure involves Principals (such as partners or corporate officers), those individuals must also sign the Franchise Agreement. This signature makes them personally responsible for upholding specific aspects of the agreement, most notably those related to keeping Bb.Q Chicken's business information confidential and refraining from competitive activities that could harm the franchise.
The FDD also states that depending on the type of business activities in which the franchisee or their Principals may be involved, Bb.Q Chicken may require the Principals to sign additional confidentiality and non-competition agreements. This highlights the importance of carefully reviewing the Franchise Agreement and any related documents with legal counsel to fully understand the scope of these obligations and potential liabilities. This is a fairly standard practice in franchising, as franchisors seek to protect their brand and trade secrets by ensuring that key individuals associated with the franchisee are legally bound to these protective measures.