For Pump It Up, what is the implication of the guaranty from FB Holdings, LLC for potential franchisees?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
rance there will not be an increase in the scope of these matters or that any future or pending lawsuits, claims, proceedings, or investigations will not be material.
NOTE 9 COMMITMENTS AND CONTINGENCIES (CONTINUED)
Employee Benefit Plans
The Company sponsors a retirement plan under the provisions of Section 401(k) of the Internal Revenue Code. The plan is available to all eligible employees meeting certain age and service requirements. Under the plan, the Company can elect to make discretionary contributions. There were no discretionary contributions made by the Company during 2023 or 2022.
GUARANTEE OF PERFORMANCE
For value received, FB HOLDINGS, LLC, an Arizona limited liability company (the "Guarantor"), located at 4343 E. Outlier Blvd., Suite 220, Phoenix, AZ 85008, absolutely and unconditionally guarantees to assume the duties and obligations of PUMP IT UP HOLDINGS, LLC, an Arizona Limited Liability Company, located at 4343 E. Outlier Blvd., Suite 220, Phoenix, AZ 85008 (the "Franchisor"), under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2025 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered into with franchisees and amended, modified or extended from time to time. This guarantee continues until 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 first occurs. 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 59)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, FB Holdings, LLC, the parent company of Pump It Up Holdings, LLC, provides a guarantee of performance to franchisees. This guarantee means that FB Holdings, LLC absolutely and unconditionally assumes the duties and obligations of Pump It Up Holdings, LLC under the franchise agreements. This is particularly important because the FDD states that financial statements are provided for FB Holdings, LLC, but not for Pump It Up Holdings, LLC, so potential franchisees do not have specific knowledge of the franchisor's financial performance. The guarantee from FB Holdings, LLC offers a level of financial security for franchisees.
This guarantee remains in effect until all obligations of Pump It Up Holdings, LLC under the franchise registrations and the Franchise Agreement are satisfied, or until the liability of Pump It Up Holdings, LLC to its franchisees under the Franchise Agreement has been completely discharged. The guarantee ensures that FB Holdings, LLC will not be released from liability if a franchisee's claim against Pump It Up Holdings, LLC is outstanding. This provides ongoing protection for the franchisee, even in situations where disputes or claims arise.
For a prospective Pump It Up franchisee, this guarantee offers assurance that the franchisor's obligations will be met, even if Pump It Up Holdings, LLC faces financial difficulties. It mitigates some of the risk associated with investing in a franchise by providing a safety net backed by the parent company. The franchisee should review Exhibit G, which includes a copy of FB Holdings, LLC's guaranty, to fully understand the terms and conditions of the guarantee. Additionally, the franchisee should note that FB Holdings, LLC does not waive receipt of notice of default on the part of Pump It Up Holdings, LLC.