Does the Bhc Guarantee specify any conditions under which the guarantee can be revoked?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Should Franchisee be in breach or default under the Franchise Agreement or any other agreement(s) by and between Franchisee and Franchisor, Franchisor may proceed directly against any or each of the undersigned without first proceeding against Franchisee and without proceeding against or naming in such suit any other Franchisee, signatory to the Franchise Agreement or any others of the undersigned. Notice to or demand upon Franchisee or any of the undersigned will be deemed notice to or demand upon Franchisee and all the undersigned, and no notice or demand need be made to or upon any of the undersigned. The cessation of or release from liability of Franchisee or any of the undersigned will not relieve any other guarantors from liability hereunder, under the Franchise Agreement, or under any other agreement(s) between Franchisor and Franchisee, except to the extent that the breach or default has been remedied or moneys owed have been paid.
Any waiver, extension of time or other indulgence granted by Franchisor or its agents, successors, or assigns, related to the Franchise Agreement or any other agreement(s) by and between Franchisee and Franchisor, will not modify or amend this Guarantee, which will be continuing, absolute, unconditional, and irrevocable.
It is understood and agreed by the undersigned that the provisions, covenants, and conditions of this Guarantee inure to the benefit of the Franchisor, its successors, and assigns. This Guarantee may be
assigned by Franchisor voluntarily or by operation of law without reducing or modifying the liability of the undersigned hereunder.
The Lanham Act (15 U.S.C. §1051 et seq.) governs any issue involving Franchisor's proprietary trademarks. To the extent applicable, the laws of the state where the Franchised BHC Restaurant is located govern all issues involving modification of this Guarantee while it is in effect. Otherwise, this Guarantee and the legal relations among the parties hereto will be governed by and construed in accordance with the laws of the State of California. Nothing in this Guarantee is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant", unfair competition, fiduciary, or any other doctrine of law of the State of California or any other state, which would not otherwise apply.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the guarantee related to the Franchise Agreement is generally designed to be robust and difficult to revoke. The guarantee remains in effect even if the franchisee is released from liability, unless the specific breach or default that triggered the guarantee has been resolved, or the money owed has been paid.
Specifically, the FDD states that any waivers or extensions granted by Bhc do not modify or amend the guarantee. The guarantee is described as "continuing, absolute, unconditional, and irrevocable." This suggests that once the guarantee is in place, it is intended to remain so, regardless of any changes or leniency Bhc might offer the franchisee in the course of the franchise agreement.
However, the FDD also indicates that the laws of the state where the franchised Bhc restaurant is located govern all issues involving modification of the Guarantee while it is in effect. This implies that while Bhc intends the guarantee to be irrevocable, state laws could potentially allow for modifications or revocations under certain circumstances. A prospective franchisee should consult with a legal professional to understand how local laws might affect the enforceability and potential modification of the guarantee.
In summary, while Bhc aims for an "absolute" and "irrevocable" guarantee, the possibility of modification is not entirely excluded, as it is subject to the laws of the state where the franchise operates. Therefore, it is important for a potential franchisee to seek legal counsel to fully understand the implications of the guarantee within their specific state.