Is the Alloy personal guarantee construed as if the guarantor executed a Franchise Agreement with identical terms?

According to Alloy's 2025 Franchise Disclosure Document, the personal guarantee agreement stipulates that the guarantor agrees to be personally bound by each term and condition in the Franchise Agreement. Specifically, the personal guarantee will be construed as if the guarantor executed a Franchise Agreement containing identical terms and conditions. This includes, but is not limited to, the noncompete provisions outlined in subparagraph 10.D of the Franchise Agreement.

This means that anyone signing the personal guarantee is not only ensuring the franchisee's financial obligations but also agreeing to abide by all the operational and legal requirements of the franchise agreement as if they were the franchisee themselves. This has significant implications, especially concerning the non-compete clause, which would restrict the guarantor's ability to engage in similar business activities, even if they are not directly involved in the day-to-day operations of the Alloy franchise.

Prospective franchisees should carefully consider the implications of the personal guarantee and ensure that anyone signing it fully understands the extent of their obligations and restrictions. It is advisable for guarantors to seek independent legal counsel to fully grasp the ramifications of being personally bound by the Alloy Franchise Agreement's terms.