factual

Who must guarantee all Notes offered by Better Homes And Gardens Real Estate?

Q: Who must guarantee all Notes offered by Better Homes And Gardens Real Estate?

- [5] All Notes must be guaranteed by the Franchisee as well as personally guaranteed by all shareholders, partners, interest holders and their respective spouses, as required by us. You must sign a Security Agreement at the time you sign the Franchise Agreement for all the Business' assets, including after acquired property, and we will file a UCC-1 financing statement for the Business' assets with the appropriate state government authority. (See Exhibit E to the Franchise Agreement or Exhibit D-3.) We have the right to require additional forms of security. Source: Item 10 — FINANCING (FDD pages 44–47)

Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDD

Answer from 2025 FDD Document

[5] All Notes must be guaranteed by the Franchisee as well as personally guaranteed by all shareholders, partners, interest holders and their respective spouses, as required by us.

You must sign a Security Agreement at the time you sign the Franchise Agreement for all the Business' assets, including after acquired property, and we will file a UCC-1 financing statement for the Business' assets with the appropriate state government authority. (See Exhibit E to the Franchise Agreement or Exhibit D-3.) We have the right to require additional forms of security.

Source: Item 10 — FINANCING (FDD pages 44–47)

What This Means (2025 FDD)

According to the 2025 Better Homes And Gardens Real Estate Franchise Disclosure Document, all Notes must be guaranteed by the franchisee. In addition to the franchisee, all shareholders, partners, interest holders, and their respective spouses, as required by Better Homes And Gardens Real Estate, must also personally guarantee the Notes.

This requirement means that if Better Homes And Gardens Real Estate offers a franchisee financing in the form of a promissory note, not only is the franchise business itself responsible for repaying the debt, but specific individuals connected to the franchise are also personally liable. This personal guarantee extends to shareholders, partners, interest holders, and their spouses, ensuring that Better Homes And Gardens Real Estate has multiple avenues for recovering the debt if the franchisee defaults.

For a prospective Better Homes And Gardens Real Estate franchisee, this has significant implications. Before signing any financing agreements, potential franchisees should fully understand the extent of their personal liability and the financial risks involved. They should also carefully consider the financial stability of their partners and shareholders, as their ability to repay the debt could impact everyone involved. It is also important to note that Better Homes And Gardens Real Estate requires a security agreement for all business assets, including after-acquired property, and will file a UCC-1 financing statement, further securing their investment.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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