Who is the guarantor in the 'THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS' for the Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
"Personal Guarantors" means those persons as specified in Section 3.3 who are required to sign the Guarantee and Assumption of Obligations in Exhibit C;
3.3 Guarantee of Performance
Each present and future: (i) shareholder of a Developer that is a corporation with at least a twenty-five percent (25%) equity interest in Developer; (ii) member of a Developer that is a limited liability company with at least a twenty-five percent (25%) equity interest in Developer; (iii) partner of a Developer that is a partnership with at least a twenty-five percent (25%) equity interest in
Developer; (iv) partner of a Developer that is a limited liability partnership with at least a twentyfive percent (25%) equity interest in Developer; (v) general partner of Developer that is a limited partnership; (vi) or managing member of a Developer that is a limited liability company; shall jointly and severally guarantee Developer's performance of each and every provision of this Agreement by executing the Guarantee in the form attached to this Agreement as Exhibit C.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the "Personal Guarantors" are required to sign the Guarantee and Assumption of Obligations in Exhibit C. These Personal Guarantors are specified in Section 3.3 of the agreement.
Specifically, Section 3.3 states that the following individuals must jointly and severally guarantee the Developer's performance of the agreement by executing the Guarantee:
- Each present and future shareholder of a corporation with at least a twenty-five percent (25%) equity interest in Developer.
- Each member of a limited liability company with at least a twenty-five percent (25%) equity interest in Developer.
- Each partner of a partnership with at least a twenty-five percent (25%) equity interest in Developer.
- Each partner of a limited liability partnership with at least a twenty-five percent (25%) equity interest in Developer.
- Each general partner of a limited partnership Developer.
- Each managing member of a limited liability company Developer.
In practical terms, this means that if the franchise is owned by a corporation, LLC, or partnership, individuals with significant ownership or management roles (25% or more equity interest, general partners, managing members) must personally guarantee the franchise's obligations under the Development Agreement. This is a common practice in franchising, as it provides the franchisor with additional security that the franchisee will fulfill its contractual obligations.