What is the role of the Guarantor in relation to the Bft Franchise Agreement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
in) provided by financing activities | (8,000 ) | 8,000 | | Increase in cash and cash equivalents | 593 | 8,000 | | Cash and cash equivalents, beginning of period | 8,000 | — | | Cash and cash equivalents, end of period | 8,593 | $ 8,000 |
EXHIBIT 3 TO FRANCHISE AGREEMENT
GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGEMENT
| to execute the Franchise Agreement (the "Franchise 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 "Franchisee"), the undersigned (each a "Guarantor"), jointly and | |
| severally, hereby unconditionally guarantee to Franchisor and its successors and assigns the full and timely | |
| performance by Franchisee of each obligation undertaken by Franchisee under the terms of the Franchise | |
| Agreement. |
Upon demand by Franchisor, Guarantor will immediately make each payment required of Franchisee under the Franchise Agreement. Guarantor hereby waives any right to require Franchisor to: (a) proceed against Franchisee for any payment required under the Franchise Agreement; (b) proceed against or exhaust any security from Franchisee; or (c) pursue or exhaust any remedy, including any legal or equitable relief, against Franchisee. 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 Franchisee, or settle, adjust or compromise any claims against Franchisee.
Guarantor waives notice of amendment of the Franchise Agreement and notice of demand for payment by Franchisee and agrees to be bound by any and all such amendments and changes to the Franchise 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 Franchisee to perform any obligation of Franchisee under the Franchise Agreement, any amendment, or any other agreement executed by Franchisee referred to therein.
Guarantor hereby acknowledges and agrees to be individually bound by all obligations and covenants of Franchisee contained in the Franchise Agreement, including those related to non-competition and confidentiality.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Guarantor plays a significant role in ensuring the franchisee's obligations are met. Upon demand from Bft, the Guarantor is responsible for making any payments the franchisee is required to make under the Franchise Agreement. The Guarantor waives their right to require Bft to first pursue the franchisee for payment or exhaust any security from the franchisee before seeking payment from the Guarantor. Bft can extend, modify, or release any debt or obligation of the franchisee without notifying the Guarantor, without affecting the Guarantor's obligations under the guarantee. The Guarantor also waives notice of any amendments to the Franchise Agreement or demands for payment by the franchisee.
Furthermore, the Guarantor agrees to defend, indemnify, and hold Bft harmless from any losses, damages, liabilities, costs, and expenses, including attorney's fees, resulting from the franchisee's failure to perform their obligations under the Franchise Agreement. The Guarantor acknowledges being individually bound by all obligations and covenants of the franchisee, including those related to non-competition and confidentiality.
If the Guarantor is a business entity, retirement or investment account, or trust, it acknowledges that if the franchisee is delinquent in payment of any guaranteed amounts, no dividends or distributions may be made to its owners, accountholders, or beneficiaries while the delinquency exists, subject to applicable law. The guarantee remains in effect even after the Franchise Agreement expires or terminates, with respect to obligations and liabilities arising from events that occurred before the expiration or termination date or that are triggered by or survive the expiration or termination of the Franchise Agreement. The validity of the guarantee and the Guarantor's obligations are not affected by any action Bft takes or is forced to take against the franchisee, or by any waiver or failure to enforce rights or remedies reserved to Bft in the Franchise Agreement.
In essence, the Guarantor acts as a financial backstop and co-obligor, providing Bft with assurance that the franchisee's financial and contractual obligations will be fulfilled. This arrangement mitigates Bft's risk by ensuring another party is responsible for the franchisee's performance. Prospective franchisees should carefully consider the implications of involving a Guarantor, as it places significant financial and legal responsibilities on the Guarantor.