What section of the Byrider franchise agreement addresses the franchisee's obligation to provide a guarantee of franchisee obligations?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in agreement | Disclosure document item |
|---|---|---|
| y. Other: Guarantee of franchisee obligations (Note 1) | Section 3.6 and Exhibit C of franchise agreement | Items 1 and 15 |
Notes:
(1) Each individual who owns a 50% or greater interest in a franchisee that is a corporation or other business entity must sign a personal guaranty and assumption of franchisee's obligations (Exhibit C), provided that if no one individual owns 50% or greater interest in franchisee, individuals who together own at least 50% interest in franchisee must sign a personal guaranty and assumption of franchisee's obligations (Exhibit C)
Source: Item 9 — Franchisee's Obligations (FDD pages 40–41)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations. Specifically, the guarantee of franchisee obligations is addressed in Section 3.6 and Exhibit C of the franchise agreement. This requirement is further detailed in Note 1 of Item 9. This obligation is also referenced in Items 1 and 15 of the disclosure document.
For a prospective Byrider franchisee, this means that if the franchisee is a corporation or other business entity, each individual owning a 50% or greater interest must sign a personal guarantee and assumption of the franchisee's obligations, as detailed in Exhibit C. If no single individual owns 50% or more, then individuals who collectively own at least 50% of the franchisee's interest must sign this personal guarantee.
This requirement is a standard practice in franchising, as it ensures that the franchisor has recourse to the personal assets of the franchisee's owners should the business fail to meet its financial obligations. It is important for potential Byrider franchisees to carefully review Section 3.6 and Exhibit C of the franchise agreement to fully understand the scope and implications of this personal guarantee. Franchisees should consult with a legal and financial advisor to assess the risks associated with providing such a guarantee.