Does the Beehive Homes Guaranty require the Guarantor to be bound by the covenants of the Franchisee?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Each of the Guarantors covenants and agrees as follows:
a.
Each Guarantor shall be bound by each and every condition and term contained in the Franchise Agreement, including, but not by way of limitation, all promises, covenants, representations and warranties of Franchisee, as though each Guarantor were a party to the Franchise Agreement, specifically, but not by way of limitation, the provisions of the Franchise Agreement relating to Confidential Information and Restrictive Covenants.
This Guaranty shall continue in favor of Franchisor notwithstanding any extension, modification, alteration, renewal, termination or expiration of the Franchise Agreement, and notwithstanding any assignment of the Franchise Agreement, with or without the Franchisor's consent.
No extension, modification, alteration, renewal, termination, expiration or assignment of the Franchise Agreement shall in any manner release or discharge the Guarantors, and each of the Guarantors consents to any such extension, modification, alteration, renewal, termination, expiration or assignment.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the Guaranty does require the Guarantor to be bound by the covenants of the Franchisee. Specifically, each Guarantor agrees to be bound by every condition and term in the Franchise Agreement, including all promises, covenants, representations, and warranties of the Franchisee, as if the Guarantor were a party to the Franchise Agreement. This includes, but is not limited to, provisions related to Confidential Information and Restrictive Covenants.
This means that the Guarantor's obligations extend to the Franchise Agreement's terms, such as those concerning confidential information and restrictive covenants. The Guaranty remains effective even if the Franchise Agreement is extended, modified, altered, renewed, terminated, or assigned, and the Guarantors consent to any such changes or assignments.
This requirement ensures that Beehive Homes has recourse not only against the franchisee but also against the guarantor for upholding the terms of the agreement. It provides an additional layer of security for Beehive Homes, ensuring that key obligations, such as maintaining confidentiality and adhering to restrictive covenants, are honored. The guarantor cannot claim release from their obligations due to changes in the Franchise Agreement.