Under the C12 Group Owner's Guaranty, are the undersigned individuals' obligations joint, several, or both?
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.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the obligations of individuals under the Owner's Guaranty are both joint and several. This means that each individual who owns at least 5% of the equity interests of the franchisee entity guarantees the franchisee's performance and financial obligations under the franchise agreement.
Practically, this has significant implications for C12 Group franchisees. With joint and several liability, C12 Group can pursue any one or all of the guarantors for the full amount of the franchisee's debt or obligations, regardless of their individual ownership percentage. This protects C12 Group by ensuring they can recover what is owed, even if one guarantor is unable to pay.
For potential C12 Group franchisees, this means that if you own at least 5% of the franchise entity, you are personally guaranteeing the franchise's obligations. It is crucial to understand the full extent of this guarantee and its potential financial impact before signing the franchise agreement. Franchisees should seek legal counsel to fully understand the implications of joint and several liability under the Owner's Guaranty.