Who is required to sign Appendix D, 'Guaranty,' for an Azal Coffee franchise?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Your name, type of entity, state of organization, owners, and percentage of ownership are listed on the Obligations and Representations of Owners attached as Appendix B. You represent that the information stated in Appendix B is accurate and complete. You agree that you will immediately notify us (and comply with the provisions of Article 14, if applicable) if there is any change in the information contained in Appendix B. Your failure to comply with this requirement will be a material default under this Agreement. Each of your owners and their spouses must personally guaranty your obligations to us by signing the Guaranty attached as Appendix D. Also, if you have an affiliate that operates a Store, we may require your affiliate to guaranty all of your obligations to us by signing the Guaranty attached as Appendix D.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Appendix D, the 'Guaranty,' must be signed by specific individuals associated with the franchisee. Specifically, each owner of the franchise and their spouses are required to personally guarantee the franchisee's obligations to Azal Coffee by signing this document.
This requirement ensures that Azal Coffee has recourse to the personal assets of the owners and their spouses if the franchise fails to meet its financial or contractual obligations. This is a common practice in franchising, as it provides the franchisor with an additional layer of security.
Furthermore, if the franchisee has an affiliate that operates a store, Azal Coffee may require that affiliate to also guarantee the franchisee's obligations by signing the Guaranty. This provision is likely intended to prevent franchisees from shielding assets or liabilities through related entities. Prospective franchisees should carefully review Appendix D and understand the full extent of the obligations they and their spouses or affiliates will be guaranteeing.