Under what circumstances does the Guarantee related to a Bft Multi-Unit Agreement terminate?
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 a Multi-Unit Agreement terminates upon the expiration or termination of the Multi-Unit Agreement itself. However, this termination does not release the Guarantor from obligations and liabilities that arose before the expiration or termination date, or those that are triggered by or survive the expiration or termination of the Multi-Unit Agreement.
In practical terms, this means that even after the Multi-Unit Agreement ends, the Guarantor remains responsible for any outstanding debts, liabilities, or obligations that were incurred during the term of the agreement. This could include unpaid fees, damages, or other financial responsibilities. The Guarantee remains binding on the Guarantor and their estate, including executors, administrators, heirs, beneficiaries, and successors.
This provision ensures that Bft is protected against financial losses even after the Multi-Unit Agreement has ended. It is important for potential Guarantors to understand the full extent of their obligations under the Guarantee, as they could be held liable for the Developer's actions or inactions even after the agreement is no longer in effect. Prospective franchisees should carefully review the terms of the Guarantee with legal counsel to fully understand their responsibilities and potential liabilities.