Does the Buns On Fire franchise agreement require a guaranty from the franchisee to the franchisor?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
As a Franchisee, you will be required to sign personal guarantees relating to the payment of fees payable to us (the "Personal Guaranty"). The Personal Guaranty is attached to the Franchise Agreement (which is attached to this Franchise Disclosure Document as Exhibit D).
Source: Item 22 — CONTRACTS (FDD pages 48–49)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, franchisees are required to sign a personal guarantee. This personal guarantee relates to the payment of fees that the franchisee owes to Buns On Fire. The document states that the Personal Guaranty is attached to the Franchise Agreement, which is included as an exhibit to the FDD.
In effect, this means that the franchisee is personally liable for the franchise's financial obligations to Buns On Fire. If the franchise business fails to pay the required fees, Buns On Fire can seek payment from the franchisee's personal assets. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default.
Prospective franchisees should carefully review the Personal Guaranty and understand the full extent of their obligations. They should also consider the potential risks and consult with an attorney or financial advisor before signing the Franchise Agreement.