Is a Benjamin Franklin Plumbing franchisee permitted to assign a note to another party?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of the willingness of Benjamin Franklin Franchising SPE LLC ("Holder") to permit ("Maker") to pay a portion of the Franchise Fee owed to Holder in connection with a BENJAMIN FRANKLIN PLUMBING Franchise Agreement and pursuant to the foregoing Promissory Note ("Note"), the undersigned ("Guarantors"), hereby personally and unconditionally: (1) guarantee to Holder and its successors and assigns that Maker shall punctually pay and perform each and every undertaking set forth in the Note; and (2) agree personally to be liable for Maker's Default under the Note.
Each Guarantor waives: (a) acceptance and notice of acceptance by Holder of the foregoing undertakings; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he or she may have to require that an action be brought against Maker or any other person as a condition of liability; (e) all rights to payments and claims for reimbursement or subrogation which any Guarantor may have against Maker arising as a result of the execution of and performance under this Guarantee by any Guarantor; (f) any law or statute which requires that Holder make demand upon, assert claims against or collect from Maker or any others, foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Maker or any others prior to making any demand upon, collecting from or taking any action against Guarantors with respect to this Guarantee; (g) any and all other notices and legal or equitable defenses to which he or she may be entitled; and (h) any and all right to have any legal action under this Guarantee decided by a jury.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is not explicitly stated whether a Benjamin Franklin Plumbing franchisee can assign a promissory note to another party. However, the FDD does include information regarding promissory notes and guarantees related to the franchise fee. Specifically, it mentions that Benjamin Franklin Franchising SPE LLC ("Holder") may permit a franchisee ("Maker") to pay a portion of the franchise fee through a promissory note. In such cases, a guarantor is required to ensure the franchisee fulfills the obligations outlined in the note. The guarantor agrees to guarantee payment and performance and waives certain rights, including notices and defenses related to the note. The FDD also mentions security agreements related to the promissory note, where the franchisee grants the franchisor a security interest in their personal property to secure the debt.
Because the FDD does not directly address the assignment of a note by the franchisee, it is important for a prospective franchisee to seek clarification from Benjamin Franklin Plumbing regarding their policies on note assignments. Understanding whether a franchisee can transfer their payment obligations to another party is crucial for financial planning and potential exit strategies.
To gain a comprehensive understanding, a prospective Benjamin Franklin Plumbing franchisee should ask the franchisor directly about the possibility of assigning a promissory note. Specifically, they should inquire about any restrictions, required approvals, or conditions that would apply if they wished to transfer their payment obligations to a third party. This information will help the franchisee make an informed decision and avoid potential conflicts in the future.