Does the Beehive Homes Guaranty specify any limits on the amount the Guarantor is liable for?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS UNDER FRANCHISE | ||
|---|---|---|
| AGREEMENT (the "Guaranty") is given this day of, 2025, by the undersigned: | ||
| 1. | In consideration of, and as an inducement to, the execution of the franchise agreement | |
| dated, 2025 (referred to in this Guaranty, together with all applicable | ||
| amendments, renewals, addenda, supplemental agreements and assignments, as the "Franchise | ||
| Agreement") by and among BEE HIVE HOMES, INC. (the "Franchisor") and the parties | ||
| identified therein as the Franchisee (the "Franchisee"), and for other good and valuable | ||
| consideration, each of the undersigned, jointly and severally, for themselves, their heirs, legal | ||
| representatives, successors and assigns (hereinafter referred to individually | and collectively as | |
| "Guarantor" whether one or more) personally, unconditionally | and irrevocably guarantees to | |
| Franchisor, and its successors and assigns, (a) the full and prompt payment of all sums owed by | ||
| Franchisee to Franchisor and its Affiliates under the Franchise Agreement and otherwise relating | ||
| to the Home, including, but not limited to, all fees and charges, interest, default interest, all other | ||
| costs and fees and attorneys' fees incurred in connection with enforcement of the Franchise | ||
| Agreement; and (b) the performance of all other obligations of Franchisee arising under the | ||
| Franchise Agreement (collectively, the "Obligations"). This Guaranty | is primary to Guarantor | |
| and Guarantor will immediately, upon request of Franchisor, make payment in full of all amounts | ||
| due and owing to Franchisor and its Affiliates under the Franchise Agreement, and perform each | ||
| and every Obligation to Franchisor and its Affiliates under the Franchise Agreement. | ||
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the Guaranty does not specify any explicit limits on the amount the Guarantor is liable for. The Guarantor personally, unconditionally, and irrevocably guarantees to Beehive Homes the full and prompt payment of all sums owed by the Franchisee to Beehive Homes and its Affiliates under the Franchise Agreement. This includes all fees and charges, interest, default interest, all other costs and fees, and attorneys' fees incurred in connection with the enforcement of the Franchise Agreement.
This means that the Guarantor's liability extends to all monetary obligations of the Franchisee under the Franchise Agreement, without any stated cap or limitation. The Guarantor is also responsible for the performance of all other obligations of the Franchisee arising under the Franchise Agreement. The Guaranty is primary to the Guarantor, meaning that Beehive Homes can seek payment directly from the Guarantor without first pursuing the Franchisee.
For a prospective Beehive Homes franchisee, this implies a significant financial risk for anyone acting as a Guarantor. They are essentially standing behind all of the Franchisee's financial and performance obligations to Beehive Homes. It is crucial for potential Guarantors to fully understand the Franchise Agreement and the potential financial exposure they face. They should also carefully consider the financial stability and business acumen of the Franchisee before agreeing to act as a Guarantor.
Given the lack of explicit limits on the Guarantor's liability, it would be prudent for a prospective franchisee and their Guarantor to seek legal counsel to fully understand the implications of the Guaranty. They may also want to negotiate with Beehive Homes to include a specific cap on the Guarantor's liability or to limit the scope of the obligations guaranteed.