Under the Beehive Homes Guaranty, is the Guaranty primary or secondary to the Guarantor?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
----------------------| | | 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. | | | | | |
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- Waivers of Certain Rights and Defenses. Each Guarantor waives: (a) any right or claim that Guarantor may have to require that an action be brought against Franchisee or any other person as a condition of Guarantor's liability under this Guaranty;
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, the Guaranty provided by the Guarantor is primary. This means that Beehive Homes can seek payment directly from the Guarantor for any amounts owed by the Franchisee under the Franchise Agreement, without first having to pursue the Franchisee.
This arrangement offers Beehive Homes a direct avenue for recourse in case of the Franchisee's default, enhancing the security of their investment and agreements. The Guarantor is immediately responsible for fulfilling the Franchisee's financial and performance obligations upon Beehive Homes' request.
For a prospective Beehive Homes franchisee, this implies that anyone acting as a Guarantor (often a principal in the franchisee entity) takes on a significant and immediate financial responsibility. They can be compelled to cover the Franchisee's debts and obligations without Beehive Homes first exhausting all options with the Franchisee. This is a notable point for potential franchisees to consider when assessing the financial implications and risks associated with the franchise agreement.