Can a guarantor of the Bhc Master Franchise Agreement be released without affecting the obligations of the other guarantors?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
Notice to or demand upon Master Franchisee or any of the undersigned will be deemed notice to or demand upon Master 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 Master Franchisee or any of the undersigned will not relieve any other guarantors from liability hereunder, under the Master Franchise Agreement, or under any other agreement(s) between Franchisor and Master 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 Master Franchise Agreement or any other agreement(s) by and between Master 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.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if there are multiple guarantors for the Master Franchise Agreement, the release of one guarantor does not automatically relieve the remaining guarantors of their obligations. The document states that the cessation of or release from liability of the Master Franchisee or any guarantor will not relieve any other guarantors from liability. This holds true under the Master Franchise Agreement or any other agreements between Bhc and the Master Franchisee. The only exception is if the breach or default has been remedied or the money owed has been paid.
This provision is significant for potential Bhc Master Franchisees because it clarifies the extent of liability assumed by each guarantor. If a prospective franchisee is considering acting as a guarantor alongside others, they should understand that their obligations are independent of the other guarantors. Even if one guarantor is released, the remaining guarantors are still responsible for fulfilling the terms of the agreement. This clause protects Bhc by ensuring that the obligations under the Master Franchise Agreement are met, regardless of changes in the guarantor structure.
Furthermore, the document emphasizes that the guarantee is continuing, absolute, unconditional, and irrevocable, and any changes or waivers granted by Bhc to the Master Franchisee do not affect the guarantee. This means that even if Bhc modifies the terms of the Master Franchise Agreement or grants extensions, the guarantors' obligations remain unchanged. This provision provides Bhc with a stable and reliable guarantee, as the guarantors cannot claim that changes to the agreement release them from their obligations. The guarantee can also be assigned by Bhc without reducing or modifying the liability of the guarantors.
In summary, the terms of the Guarantee of Master Franchise Agreement are designed to protect Bhc's interests by ensuring that the obligations under the Master Franchise Agreement are fully met, regardless of changes in the guarantor structure or modifications to the agreement itself. Prospective franchisees who are considering acting as guarantors should carefully review these provisions and understand the full extent of their liability.