Does AB Assetco guarantee Benjamin Franklin Plumbing's obligations to its franchisees?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
Exhibit I to this disclosure document contains the following:
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- The audited consolidated financial statements of AB Assetco LLC ("AB Assetco"), our parent company, (i) as of December 31, 2024 and 2023, and (ii) for each of the three years in the period ended December 31, 2024.
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- A Guarantee of Performance of our obligations by AB Assetco. Our separate financial statements are not included in this disclosure document. Should we fail to fulfill our duties and obligations to our franchisees under their Franchise Agreements, AB Assetco absolutely and unconditionally guarantees to assume those duties and obligations.
As described in Item 1, AB Inc. provides support and services to BENJAMIN FRANKLIN PLUMBING franchisees under a management agreement with us. AB Inc. was formerly known as Villa BidCo, Inc. until the company changed its name on May 17, 2021. We have included in Exhibit I the audited consolidated financial statements of AB Inc. and subsidiaries which comprise the consolidated balance sheets as of December 31, 2024, and December 31, 2023 and the related consolidated statements of comprehensive loss, of changes in stockholder's equity and of cash flows for the three years then ended December 31, 2024. These financial statements are included for disclosure purposes only; AB Inc. is not a party to the Franchise Agreement we sign with franchisees, nor does it guarantee our obligations under the Franchise Agreement we sign with franchisees.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 87)
What This Means (2025 FDD)
According to the 2025 Benjamin Franklin Plumbing Franchise Disclosure Document, AB Assetco LLC, the parent company of Benjamin Franklin Plumbing, guarantees the performance of Benjamin Franklin Plumbing's obligations to its franchisees. Specifically, should Benjamin Franklin Plumbing fail to fulfill its duties and obligations to its franchisees under their Franchise Agreements, AB Assetco absolutely and unconditionally guarantees to assume those duties and obligations.
This guarantee by AB Assetco provides a level of financial security for franchisees. It means that if Benjamin Franklin Plumbing, for any reason, cannot meet its contractual obligations, AB Assetco steps in to ensure those obligations are fulfilled. This is particularly important for new franchisees who may be concerned about the financial stability of the franchisor.
While AB Inc. provides support and services to Benjamin Franklin Plumbing franchisees under a management agreement, it is important to note that AB Inc. is not a party to the Franchise Agreement and does not guarantee Benjamin Franklin Plumbing's obligations. The financial statements of AB Inc. are included for disclosure purposes only. Therefore, franchisees should primarily focus on the guarantee provided by AB Assetco, the direct parent company, when assessing the security of their investment.
Prospective franchisees should carefully review Exhibit I of the FDD, which contains the audited consolidated financial statements of AB Assetco, to fully understand the financial capacity of the guarantor. Understanding the financial health of AB Assetco will allow franchisees to assess the strength of the guarantee and the likelihood that the parent company can meet its obligations should Benjamin Franklin Plumbing default.