Does the Guaranty for a Bombs Away franchise operate independently of the Franchise Agreement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court or arbitrator, then the parties intend that the court or arbitrator modify such restriction to the extent reasonably necessary to protect the legitimate business interests of Bombs Away Franchising.
Guarantor agrees that the existence of any claim it or Franchisee may have against Bombs Away Franchising shall not constitute a defense to the enforcement by Bombs Away Franchising of the covenants of this Section.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the covenants within the Guaranty, specifically those related to non-competition, are designed to operate independently from other aspects of the Guaranty and the Franchise Agreement itself. This means that the enforceability of the non-compete provisions is not contingent on other parts of the agreement.
This independence is significant for a prospective Bombs Away franchisee because it ensures that the restrictions on the guarantor's activities, particularly concerning competition with the Bombs Away franchise, remain in effect regardless of any disputes or issues that may arise under the Franchise Agreement. The guarantor cannot claim that a dispute with Bombs Away Franchising excuses them from adhering to the non-compete obligations.
Furthermore, if any part of the non-compete agreement is deemed unenforceable, the document specifies that a court or arbitrator should modify the restriction only to the extent necessary to protect Bombs Away's legitimate business interests. This clause demonstrates Bombs Away's intent to maintain the broadest possible protection against competition from the guarantor, within legal bounds. The guarantor's obligations, including the non-compete, continue even if the franchisee has claims against Bombs Away, reinforcing the separate and binding nature of these covenants.