Does the Bft Guarantee continue after the Multi-Unit Agreement expires or terminates, and if so, under what conditions?
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.
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 Guarantee associated with the Multi-Unit Agreement does not necessarily terminate immediately upon the agreement's expiration or termination. The Guarantee remains in effect concerning all obligations and liabilities of the Developer and Guarantor that stem from events occurring on or before the expiration or termination date. It also applies to obligations triggered by or surviving the expiration or termination of the Multi-Unit Agreement.
This continuation clause ensures that Bft can still enforce the Guarantee for any breaches or liabilities that arose during the term of the Multi-Unit Agreement, even after it has ended. This protects Bft from losses due to a franchisee's non-compliance during the agreement's active period.
For a prospective Bft franchisee, this means that their responsibilities under the Guarantee extend beyond the agreement's lifespan for certain matters. It is important to understand what specific obligations survive termination to avoid potential future liabilities. Franchisees should seek legal counsel to fully understand the implications of this clause and the scope of their ongoing responsibilities even after the Multi-Unit Agreement concludes.