What costs and expenses must the Guarantors reimburse the Franchisor for under the Bft Guarantee?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement; (b) proceed against or exhaust any security from Developer; or (c) pursue or exhaust any remedy, including any legal or equitable relief, against Developer. Without affecting the obligations of Guarantor under this Guarantee, Indemnification and Acknowledgment (the "Guarantee"), Franchisor may, without notice to Guarantor, extend, modify, or release any indebtedness or obligation of Developer, or settle, adjust or compromise any claims against Developer.
Guarantor waives notice of amendment of the Multi-Unit Agreement and notice of demand for payment by Developer and agrees to be bound by any and all such amendments and changes to the Multi-Unit Agreement.
Guarantor hereby agrees to defend, indemnify and hold Franchisor harmless against any and all losses, damages, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees, reasonable costs of investigations, court costs, and arbitration fees and expenses) resulting from, consisting of, or arising out of or in connection with any failure by Developer to perform any obligation of Developer under the Multi-Unit Agreement, any amendment, or any other agreement executed by Developer referred to therein.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Guarantor agrees to defend, indemnify, and hold Bft harmless against losses, damages, liabilities, costs, and expenses. These expenses include reasonable attorneys' fees, reasonable costs of investigations, court costs, and arbitration fees and expenses. These costs arise from any failure by the Developer to perform any obligation under the Multi-Unit Agreement, any amendment, or any other agreement executed by the Developer referred to in the Multi-Unit Agreement.
Additionally, the Guarantors must reimburse Bft for all costs and expenses it incurs in connection with enforcing the terms of the Guarantee. The provisions contained in Article 12 of the Multi-Unit Agreement (Resolution of Disputes), including Governing Law, Mediation, Mandatory Binding Arbitration, Consent to Jurisdiction, and Attorneys' Fees and Costs, are incorporated into this Guarantee by reference and shall govern this Guarantee and any disputes between the Guarantors and Bft.
In practical terms, this means that if the Developer (the franchisee) fails to meet their obligations under the Multi-Unit Agreement, the Guarantor is responsible for covering all associated costs, including legal fees and investigation expenses incurred by Bft. This could potentially expose the Guarantor to significant financial liabilities if the franchisee defaults on their obligations or breaches the agreement. Prospective franchisees should carefully review the Multi-Unit Agreement and Guarantee with legal counsel to fully understand the scope of these obligations and potential financial risks.