If the Boulder Designs franchisee is a business entity, who must personally guarantee the franchisee's obligations?

According to Boulder Designs' 2025 Franchise Disclosure Document, if the franchisee is a business entity, such as a corporation or limited liability company, anyone who owns an interest in the entity and their spouse must personally guarantee the performance of the franchisee's obligations under the Franchise Agreement. This guarantee is formalized through signing the Guaranty and Assumption of Obligations, which is included as Exhibit 3 to the Franchise Agreement.

This requirement means that all owners of the business entity, along with their spouses, are personally liable for the franchise's debts and obligations to Boulder Designs. This is a common practice in franchising, as it ensures that the franchisor has recourse to the personal assets of the business owners if the franchise fails to meet its financial or contractual obligations. The personal guarantee essentially makes the owners and their spouses co-signers of the franchise agreement.

Prospective Boulder Designs franchisees should carefully consider the implications of this personal guarantee. It is crucial to understand the full extent of the financial and legal obligations being guaranteed, as personal assets could be at risk if the franchise encounters financial difficulties. Franchisees should seek legal and financial advice to fully understand the risks and obligations associated with signing a personal guarantee before entering into the franchise agreement.