Does AB Inc. guarantee Benjamin Franklin Plumbing's obligations under the Franchise Agreement?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
As part of the Securitization Transaction described in Item 1, certain subsidiaries of AB Inc., including us, have guaranteed the indebtedness incurred in connection with the Securitization Transaction. Please see the footnotes and supplements to the financial statements in Exhibit I for more information about the Securitization Transaction.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 87)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, AB Inc. does not guarantee Benjamin Franklin Plumbing's obligations under the Franchise Agreement. While AB Inc. provides support and services to Benjamin Franklin Plumbing franchisees through a management agreement, it is not a party to the Franchise Agreement and does not guarantee the franchisor's obligations. However, AB Assetco, the parent company of Benjamin Franklin Franchising SPE LLC, does provide a Guarantee of Performance of Benjamin Franklin Plumbing's obligations. Should Benjamin Franklin Plumbing fail to fulfill its duties to franchisees, AB Assetco has guaranteed to assume those responsibilities.
This distinction is important for prospective franchisees to understand. While AB Inc. is involved in providing support services, it is AB Assetco that provides the financial guarantee. This means that if Benjamin Franklin Plumbing, as the franchisor, cannot meet its obligations, the franchisee would look to AB Assetco for recourse, not AB Inc.
Prospective franchisees should carefully review Exhibit I of the FDD, which contains the audited consolidated financial statements of AB Assetco and the details of the Guarantee of Performance. Understanding the financial stability and obligations of the guarantor is a crucial part of assessing the overall risk and security of the franchise investment. Franchisees should also note that certain subsidiaries of AB Inc., including Benjamin Franklin Plumbing, have guaranteed the indebtedness incurred in connection with the Securitization Transaction, as detailed in the footnotes and supplements to the financial statements in Exhibit I.