Does the Beehive Homes Guaranty require the Guarantor to be bound by the warranties 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.
- b.
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the Guaranty requires the Guarantor to be bound by the warranties of the Franchisee. Specifically, each Guarantor must adhere to every condition and term in the Franchise Agreement, encompassing all promises, covenants, representations, and warranties made by the Franchisee, as if the Guarantor were a direct party to the Franchise Agreement. This includes, but isn't limited to, the provisions concerning Confidential Information and Restrictive Covenants.
This means that anyone signing the Guaranty for a Beehive Homes franchise is not only guaranteeing financial and performance obligations but also legally committing to uphold all the promises and assurances the franchisee makes within the Franchise Agreement. This has significant implications for the Guarantor, as any breach of warranty by the franchisee could result in the Guarantor being held liable.
Furthermore, the Guaranty remains in effect even if the Franchise Agreement is extended, modified, altered, renewed, terminated, or assigned, regardless of whether Beehive Homes consents to the assignment. The Guarantors are not released or discharged by any of these changes, and they consent to any such modifications or assignments. This ensures that Beehive Homes has continuous protection under the Guaranty, irrespective of changes to the Franchise Agreement. This is a common practice in franchising to ensure the stability and enforceability of the franchise agreement.