Who is required to execute a guaranty in a form prescribed by Byrider during a franchise assignment?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- (8) All individuals and entities who will be direct or indirect owners must execute or have executed a guaranty in a form the Company prescribes;
If the Franchisee is a corporation, limited liability company, or other entity, each of Franchisee's owners with 50% or more direct or indirect interest in Franchisee must execute a guaranty in the form the Company prescribes undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between Franchisee and the Company; provided that if no one individual owns 50% or more interest in Franchisee, individuals who together own at least 50% ownership interest in Franchisee must execute a guaranty.
Franchisee agrees to execute a guaranty in the form Company prescribes undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between the Company and Franchisee.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, several parties may be required to execute a guaranty during a franchise assignment. If the franchisee is a corporation, limited liability company, or other entity, each owner with a 50% or more direct or indirect interest in the franchisee must execute a guaranty in a form prescribed by Byrider. If no single individual owns 50% or more, then individuals who together own at least 50% ownership interest must execute a guaranty.
Additionally, if a franchisee who is a natural person assigns their rights to a corporation, limited liability company, or other similar business entity, the franchisee agrees to execute a guaranty in the form Byrider prescribes. This ensures that the original franchisee remains personally bound by the franchise agreement, even after the business is transferred to an entity.
All individuals and entities who will be direct or indirect owners must execute or have executed a guaranty in a form the Company prescribes. This requirement ensures that Byrider has recourse against individuals or entities with a significant stake in the franchise, providing an additional layer of security for Byrider in enforcing the franchise agreement.