Does the Beauty Bungalows FDD include a Personal Guaranty contract?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
ATTACHMENTS
Appendix A – Franchisee Data Sheet
Schedule 1 – Protected Territory Acknowledgement
Appendix B – Electronic Payment Authorization
Appendix C – Collateral Assignment of Telephone Numbers, Addresses, and Listings
Appendix D – Statement of Ownership
Appendix E – Guaranty and Assumption of Franchisee's Obligations
Appendix F – Sample General Release
Appendix G – Lease Rider
Source: Item 22 — CONTRACTS (FDD pages 47–48)
What This Means (2025 FDD)
Yes, according to Beauty Bungalows' 2025 Franchise Disclosure Document, the franchise agreement includes a personal guaranty. Specifically, Exhibit E, titled "Guaranty and Assumption of Franchisee's Obligations," is listed as an attachment to the franchise agreement. This indicates that Beauty Bungalows requires a personal guarantee from its franchisees.
This personal guarantee means that the franchisee is personally responsible for the financial and operational obligations of the franchise. This responsibility extends to ensuring all payments and agreements outlined in the franchise agreement are fulfilled. The guarantor is personally bound by the agreement's provisions, including monetary obligations and specific actions or inactions detailed in the agreement.
Notably, the guaranty outlines a specific condition regarding a spouse who is also a guarantor. If the spouse becomes widowed and does not acquire an ownership interest in the franchise, they will not be held responsible for monetary obligations arising after the spouse's death, unless they later acquire an ownership interest. However, any existing monetary obligations at the time of death remain the surviving spouse's responsibility until paid in full by the estate or the guarantor spouse. Furthermore, non-monetary obligations of the agreement remain the responsibility of the surviving spouse, regardless of the death of the other spouse.
Personal guarantees are a common practice in franchising, especially for new or smaller businesses, as they provide the franchisor with additional security. Prospective Beauty Bungalows franchisees should carefully review the terms of the guaranty with legal counsel to fully understand their obligations and potential liabilities.