What specific financial 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, individuals owning at least five percent of the equity interests of the franchisee entity must guarantee the franchisee's obligations. Specifically, these individuals jointly and severally guarantee the prompt and complete payment of each and every financial obligation of the franchisee with respect to the Franchise Agreement. This means that if the franchisee fails to meet its financial responsibilities under the agreement, the individuals who signed the Owner's Guaranty are personally liable for those debts.
This requirement is a significant consideration for prospective C12 Group franchisees, especially those operating as a corporation or LLC. The personal guarantee extends the financial responsibility beyond the business entity to the individual owners. This is a common practice in franchising, as it provides the franchisor with added security that the financial obligations will be met.
C12 Group retains the discretion to pursue remedies directly against the guarantors without first pursuing action against the franchisee. This clause in the Owner's Guaranty provides C12 Group with flexibility in how they address any financial defaults, potentially expediting the recovery of funds. Prospective franchisees should carefully consider the implications of this personal guarantee and ensure they fully understand the financial obligations they are undertaking.