What is the condition for a person or entity becoming an Owner of a Bft franchise after the Effective Date?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. If Franchisee is not a natural person, then concurrently, with the signing of this Agreement, any person who directly or indirectly owns a ten percent (10%) or greater ownership interest in Franchisee (the "Owners") and each Owner's spouse (if applicable) must sign and deliver to Franchisor the Guarantee, Indemnification, and Acknowledgment attached as Exhibit 3 hereto (a "Guarantee"). Any person or entity that at any time after the Effective Date becomes an Owner, pursuant to Section 14 or otherwise, shall, as a condition of becoming an Owner, execute and deliver, and require its spouse (if applicable) to execute and deliver, to Franchisor its then-current form of Guarantee;
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, if a person or entity becomes an owner of a Bft franchise after the Effective Date, they must fulfill specific conditions. The primary condition is that the new owner must execute and deliver Bft's then-current form of Guarantee. If the new owner has a spouse, the spouse must also execute and deliver the Guarantee to Bft.
This requirement ensures that all individuals or entities with a significant ownership stake (10% or greater) in the Bft franchise are bound by the terms and obligations outlined in the Guarantee. This includes adherence to the franchise agreement and any related legal and financial responsibilities. By requiring the spouse to also sign the Guarantee, Bft aims to further secure the obligations and prevent potential legal loopholes.
For a prospective franchisee, this means that if the franchise is owned by a legal entity (like an LLC or corporation), any individual who acquires a 10% or greater ownership interest after the franchise agreement is signed must also sign the Guarantee. This is a standard practice in franchising to ensure that all major stakeholders are personally invested in the success and compliance of the franchise. It is important to review the Guarantee document carefully to understand the full scope of the obligations being undertaken.