For a married Big Apple Bagels franchisee, what is the implication of signing a personal guarantee?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- FRANCHISEE MUST SIGN A PERSONAL GUARANTEE TO AGREE TO BE PERSONALLY LIABLE FOR THE FRANCHISEE'S OBLIGATIONS MAKING YOU AND YOUR SPOUSE INDIVIDUALLY LIABLE FOR YOUR FINANCIAL OBLIGATIONS UNDER THE AGREEMENT IF YOU ARE MARRIED. THE GUARANTEE WILL PLACE YOUR AND YOUR SPOUSE'S MARITAL AND PERSONAL ASSETS AT RISK IF YOUR FRANCHISE FAILS.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, if you are married and become a franchisee, you and your spouse must sign a personal guarantee. This guarantee makes you and your spouse individually liable for the financial obligations under the Franchise Agreement.
This means that if the Big Apple Bagels franchise fails, your and your spouse's marital and personal assets are at risk. The franchisor can pursue these assets to cover any outstanding debts or obligations of the franchise. This is a significant risk to consider before investing in a Big Apple Bagels franchise.
Personal guarantees are a common practice in franchising, as they provide the franchisor with additional security. However, prospective franchisees should carefully evaluate their financial situation and risk tolerance before signing such a guarantee. It is advisable to seek legal and financial counsel to fully understand the implications of a personal guarantee and explore options for mitigating the risk.