Under the Guaranty and Assumption of Obligations, what does each undersigned individual personally and unconditionally guarantee to Big Apple Bagels for the term of the Agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of that certain BAB SYSTEMS, INC. Franchise Agreement of even date herewith (the "Agreement") by BAB Systems, Inc. (the "Franchisor"), each of the undersigned hereby personally and unconditionally (a) guarantees to Franchisor, and its successors and assigns, for the term of the Agreement and thereafter as provided in | the | Agreement, | that | | ("Franchisee") | shall | punctually pay and perform each and every undertaking, | agreement and covenant set forth in the | Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including without limitation the provisions of Paragraph 9.f. and 17.d.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations stipulates that each individual signing the agreement personally and unconditionally guarantees to Big Apple Bagels that the franchisee will fulfill all obligations outlined in the Franchise Agreement. This guarantee extends for the entire term of the agreement and beyond, as specified within the agreement itself.
Specifically, the guarantor ensures that the franchisee will punctually pay and perform every undertaking, agreement, and covenant detailed in the Franchise Agreement. Furthermore, the guarantor agrees to be personally bound by and liable for any breaches of the agreement. This includes both monetary obligations, such as royalty payments or marketing contributions, and obligations related to specific actions or activities, such as adhering to operational standards or refraining from competitive behavior.
This provision has significant implications for prospective Big Apple Bagels franchisees. Individuals signing the Guaranty and Assumption of Obligations are taking on substantial personal financial risk, as they can be held personally liable for the franchisee's failures. It is crucial for potential franchisees and their guarantors to carefully review the entire Franchise Agreement to fully understand the scope of the obligations being guaranteed and to assess their ability to meet these obligations. Seeking legal counsel to review these documents is highly advisable.