How does the guarantee from BFG Holdco, Inc. affect my financial risk as a Cool Binz franchisee?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
For value received, BFG Holdco, Inc., a Delaware corporation (the "Guarantor"), located at 3310 West End Avenue, Suite 620, Nashville, TN 37203, absolutely and unconditionally guarantees to assume the duties and obligations of Chem-Dry, Inc., NHance, Inc., 1-800 Water Damage International, LLC, Hoodz International, LLC, Ductz International, LLC, Patch Boys International, LLC, Plumberz International, LLC, Packoutz International, LLC, Safer Home Services International, LLC, Cool Binz International, LLC, Redbox+ International, LLC and JunkCo+ International, LLC, under their franchise registrations in each state where the franchises are registered, and under its Franchise Agreement identified in their Franchise Disclosure Documents issued March 28, 2025 (individually, each, a "Franchisor"), and as the Franchise Agreements may be entered into with all such obligations of the Franchisor under its franchise registrations and the Franchise Agreement are satisfied or until the liability of Franchisor to its franchisees under the Franchise Agreement has been completely discharged, whichever occurs first. The Guarantor is not discharged from liability if a claim by a franchisee against the Franchisor remains outstanding, notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and its successors and assigns.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 62)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, BFG Holdco, Inc. provides a guarantee of performance, which can affect a franchisee's financial risk. BFG Holdco, Inc. absolutely and unconditionally guarantees to assume the duties and obligations of Cool Binz International, LLC under its franchise registrations and Franchise Agreement. This guarantee remains in effect until all obligations of Cool Binz under its franchise registrations and the Franchise Agreement are satisfied or until the liability of Cool Binz to its franchisees under the Franchise Agreement has been completely discharged, whichever occurs first.
This guarantee means that if Cool Binz fails to meet its obligations to franchisees, BFG Holdco, Inc. steps in to fulfill those obligations. This provides a level of financial security for franchisees, as they have recourse to BFG Holdco, Inc., a potentially larger and more stable entity, if Cool Binz defaults. The guarantee is binding on BFG Holdco, Inc. and its successors and assigns, ensuring its continued validity even if the company changes ownership.
However, the guarantee does not waive the requirement for the franchisee to provide notice of default on the part of Cool Binz. This means that franchisees must still actively monitor Cool Binz's performance and promptly notify BFG Holdco, Inc. of any breaches or failures to perform. The guarantee aims to protect franchisees by ensuring that a financially stable entity stands behind the obligations of Cool Binz, reducing the risk that franchisees will suffer losses due to the franchisor's non-performance.