Under the C12 Group Owner's Guaranty, what representation are the undersigned individuals making regarding their equity ownership?
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 C12 Group's 2025 Franchise Disclosure Document, the Owner's Guaranty requires each individual signing the agreement to represent and warrant that they own at least five percent (5%) of the equity interests in the franchisee entity. This is a legally binding declaration made to induce C12 Group to enter into the franchise agreement.
This clause has significant implications for the financial obligations of the C12 Group franchisee. By signing the Owner's Guaranty, these individuals jointly and severally guarantee the franchisee's performance of all obligations under the agreement, including the prompt and complete payment of all financial obligations. This means that each individual is liable for the full amount of the franchisee's debt and responsibilities, regardless of their specific role or equity percentage beyond the minimum 5%.
Furthermore, C12 Group has the right to pursue legal remedies directly against any one or more of the individuals who signed the Owner's Guaranty, without first having to pursue action against the franchisee itself. This provides C12 Group with a direct avenue to recover any losses or damages resulting from the franchisee's failure to meet its obligations. Prospective franchisees should fully understand the implications of this personal guarantee and seek legal counsel to assess their individual risk exposure before signing the franchise agreement.