Does the Afuri Ramen Dumpling franchise agreement include a personal guaranty?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Instructions for signatures (above) for "Franchisee" and "Transferee": If you are a corporation, limited liability company or other business entity, then this Agreement should be signed by a company officer or owner authorized to sign on behalf of the company. Additionally, this Agreement must be signed by all officers and owners of the company as individuals.
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 Franchise Disclosure Document, the franchise agreement includes a personal guaranty. Exhibit I of the FDD is titled "PERSONAL GUARANTY AGREEMENT." This agreement requires the undersigned to waive certain rights, including acceptance and notice of acceptance by the Franchisor, notice of demand for payment, protest and notice of default, and any right to require action against the Franchisee before seeking liability from the guarantor.
In practical terms, this means that if you are an owner or officer of a corporation, limited liability company, or other business entity that becomes an Afuri Ramen Dumpling franchisee, you will likely be required to sign a personal guarantee. This makes you personally liable for the financial obligations of the franchise.
The personal guaranty protects Afuri Ramen Dumpling by ensuring that there is an individual who is ultimately responsible for the franchise's debts and obligations. This is a common practice in franchising, as it provides the franchisor with an additional layer of security. Prospective franchisees should carefully consider the implications of signing a personal guarantee and seek legal advice before doing so.