Even after termination of the Franchise Agreement for a Bft franchise, under what conditions does the Guarantee remain in effect?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guarantee shall terminate upon the expiration or termination of the Franchise Agreement, except that this Guarantee shall continue in full force and effect with respect to all obligations and liabilities of Franchisee 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 Franchise Agreement This Guarantee is binding upon each Guarantor and its respective estate, executors, administrators, heirs, beneficiaries, and successors in interest.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to the 2025 FDD, the Guarantee associated with a Bft franchise agreement does not automatically terminate when the Franchise Agreement expires or is terminated. Instead, it remains in full effect under specific circumstances.
The Guarantee remains in effect regarding all obligations and liabilities of both the franchisee and the guarantor if these obligations and liabilities arise from events that occurred on or before the date the Franchise Agreement expired or was terminated. Additionally, the Guarantee stays in effect if the obligations and liabilities are triggered by, or survive, the expiration or termination of the Franchise Agreement.
This means that even after the franchise agreement ends, the guarantor is still responsible for any outstanding debts, liabilities, or obligations that were incurred during the term of the agreement or that continue as a result of the termination itself. This provision ensures that Bft can pursue the guarantor for any unresolved issues, providing an additional layer of security for the franchisor.