If two people sign the Bombs Away franchise agreement as 'Franchisee', what are their liabilities?

According to the 2024 Bombs Away Franchise Disclosure Document, if two or more people sign the franchise agreement as "Franchisee", they will have joint and several liability. This means that each individual is fully responsible for all the obligations and debts of the franchise. Bombs Away can pursue any one of them for the full amount owed, regardless of their individual contributions or agreements between themselves.

In practical terms, this has significant implications for prospective franchisees. If one franchisee is unable to meet their financial obligations or breaches the franchise agreement, the other franchisee(s) become fully liable. This could include responsibility for unpaid royalties, marketing fees, or any other financial obligations, as well as legal liabilities resulting from breaches of contract.

This arrangement protects Bombs Away by ensuring that there are multiple parties responsible for upholding the franchise agreement. However, it also creates a substantial risk for each individual franchisee, as they are potentially liable for the actions or inactions of their co-franchisees. Prospective franchisees should carefully consider this joint and several liability and ensure they have a strong working relationship and clear agreement with their co-franchisees before signing the agreement. It is advisable to seek legal and financial advice to fully understand the implications of this clause.