In the Bft Multi-Unit Agreement, what is the role of the 'Guarantor'?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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- As previously indicated, "Soft Opening" shall mean that the respective Studio's doors are open to the general public for participating in regular classes in the physical premises of the Studio. 7. Additional Terms or Modifications to This Agreement (which terms, if any, will control any inconsistencies between the following and the terms in the body of this Agreement): [insert as applicable] BFT FRANCHISE SPV, LLC, [NAME OF DEVELOPER] a Delaware limited liability company Capacity:
MAP OF DEVELOPMENT AREA
EXHIBIT B TO MULTI-UNIT AGREEMENT
GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGEMENT
| For value received, and in consideration for, and as an inducement to BFT Franchise SPV, LLC (the | |
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| "Franchisor") to execute the Multi-Unit Agreement | |
| (the "Multi-Unit | |
| Agreement"), dated | |
| , 20 (the "Effective Date"), by and between Franchisor and or his | |
| assignee, if a partnership, corporation or limited liability company is later formed (the "Developer"), the | |
| undersigned (each a "Guarantor"), jointly and severally, hereby unconditionally guarantee to Franchisor | |
| and its successors and assigns the full and timely performance by Developer of each obligation undertaken | |
| by Developer under the terms of the Multi-Unit Agreement. |
Upon demand by Franchisor, Guarantor will immediately make each payment required of Developer under the Multi-Unit Agreement. Guarantor hereby waives any right to require Franchisor to: (a) proceed against Developer for any payment required under the Multi-Unit 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.
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, a Guarantor in the Multi-Unit Agreement plays a crucial role in ensuring the Developer (franchisee) fulfills their obligations. The Guarantor unconditionally guarantees the full and timely performance of all obligations undertaken by the Developer under the terms of the Multi-Unit Agreement. This means the Guarantor is essentially vouching for the financial and operational commitments of the Developer.
Specifically, upon demand by Bft, the Guarantor must immediately make any payment required of the Developer under the Multi-Unit Agreement. The Guarantor waives any right to require Bft to first pursue the Developer for payment or exhaust any security from the Developer before seeking payment from the Guarantor. Furthermore, Bft can extend, modify, or release any debt or obligation of the Developer without notifying the Guarantor, without affecting the Guarantor's obligations under the Guarantee.
The Guarantor also agrees to defend, indemnify, and hold Bft harmless from any losses, damages, liabilities, costs, and expenses (including attorney's fees) resulting from the Developer's failure to perform their obligations under the Multi-Unit Agreement. The Guarantor acknowledges being individually bound by all obligations and covenants of the Developer, including those related to non-competition. If the Guarantor is a business entity, retirement or investment account, or trust, it agrees that no dividends or distributions may be made to its owners, accountholders, or beneficiaries if the Developer is delinquent in payment of any guaranteed amounts.
This Guarantee remains in effect even after the expiration or termination of the Multi-Unit Agreement, with respect to obligations and liabilities arising from events that occurred before the termination date or that are triggered by the termination itself. The Guarantor is also responsible for reimbursing Bft for all costs and expenses incurred in enforcing the terms of the Guarantee. This arrangement is typical in franchising, where franchisors seek additional security to ensure franchisees meet their contractual obligations, especially in multi-unit agreements involving significant investment and development responsibilities.