Who is the guarantor unconditionally guaranteeing the franchisee's obligations to All States M.E.D.?

According to the 2024 All States M.E.D. Franchise Disclosure Document, all individuals holding a legal or beneficial interest of five percent (5%) or greater in the franchisee are required to execute an Unlimited Guaranty and Assumption of Obligations. This agreement, attached as Schedule 3, mandates that these holders assume and fulfill all of the franchisee's obligations under the Franchise Agreement and be personally liable for them.

This means that anyone with a significant ownership stake (5% or more) in the franchisee entity must personally guarantee the franchisee's performance. This is a common practice in franchising, designed to ensure that the franchisor has recourse to individual assets if the franchisee, as a business entity, fails to meet its financial or operational obligations.

The personal guarantors must agree to assume and discharge all of the franchisee's obligations. This includes, but is not limited to, financial obligations such as royalty payments, adherence to operational standards, and compliance with all terms outlined in the Franchise Agreement. By signing the Unlimited Guaranty and Assumption of Obligations, these individuals become directly and personally liable for any breaches or failures by the franchisee.

Prospective All States M.E.D. franchisees should carefully consider the implications of this requirement, especially if they plan to bring in partners or investors with significant ownership stakes. It is essential that all parties involved understand the extent of their personal liability and are comfortable with the risks associated with guaranteeing the franchisee's obligations.