Who is exempt from signing the personal guaranty for a Bor Restoration franchise?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
If you take ownership of the franchise other than as a natural person at any time during the Initial Term or any renewal or extension thereof, you and all equity owners must sign the Guaranty, which is attached as Exhibit 8. The Guarantors will be bound by all restrictive covenants found herein, including all covenants in Articles 6 and 15.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 32–33)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, if the franchise is owned by an entity other than a natural person (i.e. a corporation or LLC) at any point during the franchise term, then all equity owners of that entity must sign the Guaranty agreement. This agreement is included as Exhibit 8 in the FDD.
This means that the personal guaranty is generally required. However, the document does not explicitly state who, if anyone, is exempt from signing it when the franchise is owned by a natural person. It implies that if the franchise is owned by a natural person, they would be required to sign the Guaranty.
Prospective Bor Restoration franchisees should clarify with the franchisor under what specific conditions, if any, an equity owner might be exempt from the personal guaranty. Understanding the circumstances that trigger the guaranty requirement is crucial for assessing the personal financial risk associated with the franchise.