If the Carbones Pizzeria Franchise Agreement is transferred to an entity, who must sign a personal guaranty?

According to the 2025 Carbones Pizzeria Franchise Disclosure Document, if the Franchise Agreement is transferred to an entity, including a partnership, both the franchisee and any other owners, along with their spouses, are required to sign a personal guaranty. This guaranty covers all obligations under the Franchise Agreement and includes an agreement to be bound by all such obligations. This requirement ensures that Carbones Pizzeria has recourse to the personal assets of the owners and their spouses should the franchisee entity fail to meet its financial or operational obligations.

This personal guaranty is a standard practice in franchising, designed to protect the franchisor's interests. By requiring a personal guaranty, Carbones Pizzeria aims to ensure that the individuals behind the franchisee entity are fully committed to the success of the franchise and are willing to be held personally accountable. The guaranty also extends to the confidentiality and noncompete provisions within the Franchise Agreement, further safeguarding Carbones Pizzeria's proprietary information and market position.

For a prospective Carbones Pizzeria franchisee, this means that if you plan to operate the franchise through a business entity, you and your spouse, as well as any other owners and their spouses, will need to sign a personal guaranty. This is a significant legal and financial commitment, as it puts your personal assets at risk. It is crucial to carefully review the Franchise Agreement and the guaranty document with legal and financial advisors to fully understand the implications before signing.