Does the agreement to arbitrate with Bft continue after the expiration or termination of the Franchise Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guarantee shall terminate upon the expiration or termination of the Multi-Unit Agreement, except that this Guarantee shall continue in full force and effect with respect to all obligations and liabilities of Developer and Guarantor that arise from events that occurred on or before the effective date of such expiration or termination or that are triggered by or survive expiration or termination of the Multi-Unit Agreement This Guarantee is binding upon each Guarantor and its respective estate, executors, administrators, heirs, beneficiaries, and successors in interest.
The validity of this Guarantee and the obligations of Guarantor(s) hereunder shall in no way be terminated, restricted, diminished, affected or impaired by reason of any action that Franchisor might take or be forced
to take against Developer, or by reason of any waiver or failure to enforce any of the rights or remedies reserved to Franchisor in the Multi-Unit Agreement or otherwise.
The use of the singular herein shall include the plural. Each term used in this Guarantee, unless otherwise defined herein, shall have the same meaning as when used in the Multi-Unit Agreement.
The provisions contained in Article 12 of the Multi-Unit Agreement (Resolution of Disputes), including, without limitation, Section 12.A (Governing Law), Section 12.C (Mediation), Section 12.D (Mandatory Binding Arbitration), Section 12.F (Consent to Jurisdiction), and Section 12.K (Attorneys' Fees and Costs), are incorporated into this Guarantee by reference and shall govern this Guarantee and any disputes between the Guarantors and Franchisor. The Guarantors shall reimburse Franchisor for all costs and expenses it incurs in connection with enforcing the terms of this Guarantee.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to the 2025 Bft Franchise Disclosure Document, the terms for the resolution of disputes, including mediation, governing law, consent to jurisdiction, and mandatory binding arbitration, as detailed in Article 12 of the Multi-Unit Agreement, are incorporated into the Guarantee agreement and will govern any disputes between the Guarantors and Bft. This means that even after the Multi-Unit Agreement expires or is terminated, these specific dispute resolution terms remain in effect for matters related to the Guarantee.
Specifically, the Guarantee remains in full force and effect regarding obligations and liabilities arising from events that occurred on or before the expiration or termination date, or that are triggered by or survive the expiration or termination of the Multi-Unit Agreement. This ensures that Bft and the Guarantors are still bound by the dispute resolution methods outlined in the Multi-Unit Agreement for any issues related to the Guarantee that arise even after the main agreement has ended.
This continuation of the arbitration agreement is a standard practice in franchising to ensure that all parties are held accountable for their obligations, even after the franchise agreement has expired or been terminated. It provides a clear framework for resolving disputes and can help to avoid costly and time-consuming litigation. Prospective franchisees should carefully review the terms of the Guarantee and the incorporated dispute resolution provisions to understand their rights and obligations.