If the Bft franchisee is not a natural person, who must sign and deliver the Guarantee, Indemnification, and Acknowledgment?
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 the franchisee is not a natural person, any individual who directly or indirectly owns a ten percent (10%) or greater ownership interest in the franchisee, along with each owner's spouse (if applicable), must sign and deliver the Guarantee, Indemnification, and Acknowledgment to Bft. This document is attached as Exhibit 3 to the Franchise Agreement. This requirement applies concurrently with the signing of the Franchise Agreement.
Furthermore, any person or entity that becomes an owner after the effective date of the agreement, whether through Section 14 or otherwise, is also required to execute and deliver the then-current form of the Guarantee to Bft as a condition of becoming an owner. This subsequent owner's spouse (if applicable) must also execute and deliver the Guarantee.
This provision ensures that Bft has recourse to the personal assets of the individuals who ultimately control the franchisee entity, providing an additional layer of security for Bft. It is a common practice in franchising to require personal guarantees from owners of franchisee entities, as it aligns their interests with the success of the franchise and mitigates the risk of the entity failing to meet its obligations under the Franchise Agreement.