Under what circumstances will the Brueggers Bagels Guaranty terminate, and what obligations remain in effect after termination?
Brueggers_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guaranty will terminate upon the termination or expiration of the Agreement, except that all obligations and liabilities of the Guarantors arising from events which occurred on or before the effective date of termination will remain in full force and effect until satisfied or discharged by the Guarantors, and all covenants which by their terms continue in force after the expiration or termination of the Agreement will remain in force according to their terms.
Upon the death of a Guarantor, the Guarantor's estate will be bound by this Guaranty, but only for obligations existing at the time of death. The obligations of the surviving Guarantors will continue in full force and effect.
If the Guarantor resides in a community property state, the Guarantor will cause his or her spouse, if any, to execute this Guaranty.
Source: Item 22 — CONTRACTS (FDD page 61)
What This Means (2025 FDD)
According to Brueggers Bagels's 2025 Franchise Disclosure Document, the Guaranty terminates upon the termination or expiration of the Franchise Agreement. However, any obligations or liabilities of the guarantors that arose from events occurring on or before the termination date remain in full effect until they are satisfied or discharged. Additionally, any covenants that are explicitly stated to continue after the agreement's termination will remain in force according to their specific terms. This means that even after the Franchise Agreement ends, the guarantor may still be responsible for certain financial or legal obligations that were in place during the agreement's term.
In the event of a guarantor's death, their estate will be bound by the Guaranty, but only for obligations that existed at the time of death. The obligations of any surviving guarantors will continue without change. If a guarantor resides in a community property state, their spouse may also be required to execute the Guaranty, indicating a shared responsibility for the franchise's obligations.
This clause ensures that Brueggers Bagels can continue to hold the guarantors accountable for their commitments even after the franchise agreement has ended, covering any outstanding debts, legal issues, or ongoing responsibilities as defined in the original agreement. Prospective franchisees should carefully review the terms of the Guaranty and understand the full extent of their obligations, as well as those of any co-signers or spouses, to avoid potential liabilities after the franchise agreement expires or is terminated.