Who, besides owners, must execute a Guarantee for a Bft franchise if the franchisee is a legal entity?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 1: THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES]
ITEM 1 THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES
To simplify the language, this disclosure document (this "Disclosure Document") uses "we," "us," "our," "Franchisor" or "BFT" to mean BFT Franchise SPV, LLC, the franchisor. "You" means the person, corporation, partnership or other entity that buys the franchise and those of your owners who personally assume and guarantee performance of your obligations under your agreements with us. Terms used but not defined in this Disclosure Document (including various capitalized terms) have the meanings given to them in the Franchise Agreement attached as Exhibit A to this Disclosure Document (the "Franchise Agreement").
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 56–57)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, if the franchisee is a legal entity, those owners who personally assume and guarantee performance of the franchisee's obligations under the agreements with Bft must execute a guarantee. The FDD states that "'You' means the person, corporation, partnership or other entity that buys the franchise and those of your owners who personally assume and guarantee performance of your obligations under your agreements with us."
This means that if a corporation or partnership purchases the Bft franchise, the owners who agree to be personally responsible for the franchise's financial and contractual obligations must sign a guarantee. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the franchisee defaults on its obligations. The guarantee essentially makes these owners personally liable for the debts and actions of the franchise entity.
Prospective Bft franchisees should carefully consider the implications of signing a personal guarantee. It is advisable to seek legal counsel to fully understand the extent of the obligations and potential risks involved. Franchisees should also ensure they have a solid business plan and sufficient financial resources to meet their obligations under the Franchise Agreement, as their personal assets could be at risk if the franchise fails.