Can the validity of the Bft Guarantee be terminated, restricted, diminished, affected, or impaired by actions the Franchisor takes against the Developer?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
The validity of this Guarantee and the obligations of Guarantor(s) hereunder shall in no way be terminated, restricted, diminished, affected or impaired by reason of any action that Franchisor might take or be forced
to take against Developer, or by reason of any waiver or failure to enforce any of the rights or remedies reserved to Franchisor in the Multi-Unit Agreement or otherwise.
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 validity and obligations of the Guarantor under the Guarantee will not be terminated, restricted, diminished, affected, or impaired due to any action that Bft might take or be forced to take against the Developer. This holds true regardless of any waiver or failure to enforce rights or remedies reserved to Bft in the Multi-Unit Agreement or otherwise.
This means that even if Bft takes action against the Developer (the franchisee), such as enforcing penalties or terminating the agreement, the Guarantor's obligations under the Guarantee remain fully in effect. The Guarantee remains valid and enforceable, ensuring that Bft can still seek recourse from the Guarantor for the Developer's obligations.
For a prospective Bft franchisee, this highlights the importance of understanding the Guarantee and its implications for any individuals or entities acting as Guarantor. The Guarantor's obligations are independent of the relationship between Bft and the Developer, providing Bft with an additional layer of security. Franchisees should ensure their Guarantors are fully aware of this provision and its potential consequences.