Does Afuri Ramen Dumpling enter the agreement relying on the individual character of the franchisee?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Exhibit I to Afuri Franchise Disclosure Document
PERSONAL GUARANTY AGREEMENT
Each of the undersigned waives: (1) acceptance and notice of acceptance by the Franchisor of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations guaranteed; (4) any right the undersigned may otherwise have to require that an action be brought against the Franchisee or any other person as a condition of liability.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling FDD, the franchise agreement includes a Personal Guaranty Agreement. This agreement requires the franchisee, and potentially other individuals such as company officers or owners, to personally guarantee the franchisee's obligations to Afuri Ramen Dumpling.
The Personal Guaranty Agreement stipulates that the undersigned waives certain rights, including the right to require Afuri Ramen Dumpling to first bring an action against the franchisee or any other person before seeking recourse from the guarantor. This means that Afuri Ramen Dumpling can seek to enforce the obligations directly against the individuals who signed the guaranty, without first having to pursue the business entity.
This requirement suggests that Afuri Ramen Dumpling places importance on the financial commitment and personal responsibility of the individuals associated with the franchise. By requiring a personal guarantee, Afuri Ramen Dumpling aims to ensure that there is a direct line of accountability to the franchisor, which can provide an additional layer of security for Afuri Ramen Dumpling.