Who must sign the personal guaranty attached as Exhibit 6 in the Brain Balance franchise agreement?

According to Brain Balance's 2025 Franchise Disclosure Document, individual parties owning ten percent (10%) or more interest in the franchisee must sign the personal guaranty attached as Exhibit 6. These individuals are referred to as "Guarantors". This requirement is an inducement for Brain Balance to execute the franchise agreement.

In practical terms, this means that if the franchisee is a corporation or partnership, any individual with a significant ownership stake (10% or more) will be personally responsible for the franchisee's obligations under the franchise agreement. This is a common practice in franchising, as it ensures that the franchisor has recourse to individual assets if the franchisee entity fails to meet its financial or contractual obligations.

Prospective Brain Balance franchisees should carefully consider the implications of signing a personal guaranty, as it puts their personal assets at risk. They should also review Exhibit 6 to fully understand the scope of the guaranty and the obligations they are guaranteeing. It is advisable to seek legal counsel to discuss the risks and potential liabilities associated with signing a personal guaranty before entering into the franchise agreement.