If the franchisee is an entity, who must sign a personal guarantee for an Alloy franchise?

According to Alloy's 2025 Franchise Disclosure Document, if the franchisee is a business entity, all owners of that entity must sign a personal guarantee. This guarantee must be in a form approved by Alloy, with the current form attached to the Franchise Agreement. However, a spouse is not required to sign a personal guarantee unless they are an owner of the entity.

This requirement means that anyone holding an ownership stake in the franchisee business, such as partners or shareholders, will be personally liable for the franchise's obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default or breach of contract by the franchisee.

Prospective Alloy franchisees should carefully consider the implications of signing a personal guarantee, as it puts their personal assets at risk. They should also review the form of the guarantee attached to the Franchise Agreement to understand the full extent of their obligations. It is advisable to seek legal counsel to fully understand the terms and conditions of the personal guarantee before signing the Franchise Agreement.