What obligations of the Franchisee are guaranteed by the undersigned individuals under the C12 Group Owner's Guaranty?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned individuals represents and warrants that he/she owns at least five percent (5%) of the equity interests of the above-referenced entity.
Accordingly, to induce Franchisor to enter into this Agreement, each of the undersigned individuals, jointly and severally, hereby guarantees the prompt and complete performance of each and every obligation of the Franchisee with respect to the foregoing Agreement and the prompt and complete payment of each and every financial obligation of the Franchisee with respect to the foregoing Agreement.
The undersigned individuals agree that Franchisor does not have to pursue any remedies Franchisor may have against the Franchisee, but rather, Franchisor may, in its sole discretion, proceed directly and primarily against any one or more of the undersigned individuals with or without joining the above-named Franchisee as principal or as a named party in any proceeding.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the Owner's Guaranty stipulates that certain individuals must guarantee the franchisee's obligations. Specifically, individuals owning at least 5% of the franchisee's equity interests must guarantee the franchisee's performance and financial obligations. This requirement ensures that the franchisor has recourse against individuals with a vested interest in the franchise's success.
This guarantee means that if the C12 Group franchisee fails to meet its obligations under the Franchise Agreement, such as making required payments or adhering to operational standards, the franchisor can pursue the guarantors directly. The franchisor is not required to first seek remedies from the franchisee itself. This provides C12 Group with an added layer of security and assurance that the franchisee will fulfill its commitments.
For a prospective C12 Group franchisee, this implies that any individual holding a significant equity stake (5% or more) will be personally liable for the franchise's debts and obligations. These individuals must understand the full scope of the Franchise Agreement and be prepared to honor the franchisee's commitments. This requirement is not uncommon in franchising, as it aligns the interests of the owners with the success of the franchise and protects the franchisor's investment.