Under the Brueggers Bagels Development Agreement Guaranty, what is the role of the 'Agreement'?
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' 2025 Franchise Disclosure Document, the Development Agreement Guaranty is tied to the Development Agreement. The Guaranty terminates when the Development Agreement terminates or expires. However, any obligations or liabilities of the guarantors that arose before the termination date remain in effect until they are fulfilled. Also, any covenants that are meant to continue after the Development Agreement expires or terminates will remain in effect according to their terms.
For a prospective Brueggers Bagels developer, this means that even after the Development Agreement ends, certain obligations might still exist. These could include financial responsibilities or adherence to specific covenants that were part of the original agreement. It is important to understand which obligations survive the termination of the agreement.
Additionally, the FDD states that if a guarantor dies, their estate is still responsible for obligations that existed at the time of death. If the guarantor lives in a community property state, their spouse may also be required to execute the Guaranty. This highlights the importance of understanding the full scope of the Guaranty and its potential impact on personal assets and estates.