For Antioch Pizza Shop, who is required to personally guarantee the Development Agreement?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement must be personally guaranteed and the obligations hereunder assumed by all of the Owners of the Developer, and all such Owners must execute the Guaranty and Assumption of Obligations which is attached hereto as Exhibit C concurrently with the execution of this Agreement by Developer.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the Development Agreement must be personally guaranteed by all Owners of the Developer. These Owners are also required to execute a Guaranty and Assumption of Obligations, which is attached as Exhibit C to the Development Agreement. This must be done concurrently with the execution of the Development Agreement by the Developer.
This requirement means that the personal assets of the Owners are at risk should the Developer fail to meet its obligations under the Development Agreement. This is a common practice in franchising, as it provides the franchisor with additional security and ensures that the Owners are personally invested in the success of the multi-unit development.
Prospective franchisees should carefully review Exhibit C and understand the full extent of their personal liability before signing the Development Agreement. They should also consult with an attorney and financial advisor to assess the risks and implications of providing a personal guarantee.