If the Carbones Pizzeria franchisee is an entity, who must sign a personal guaranty?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
Each individual who is an owner of any entity, including a partnership, that is the franchisee, and their spouse, must sign a personal guaranty of all the obligations of the franchisee. This guaranty also includes an agreement to be bound by all provisions of the Franchise Agreement, including the confidentiality and noncompete provisions. The form of Guaranty is attached to the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 23)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, if the franchisee is an entity such as a partnership, each individual who owns the entity, along with their spouse, must sign a personal guaranty. This guaranty covers all of the franchisee's obligations. It also includes an agreement to adhere to all provisions within the Franchise Agreement, which includes confidentiality and noncompete clauses.
This requirement ensures that Carbones Pizzeria has recourse to the personal assets of the owners should the franchisee entity fail to meet its financial or contractual obligations. The personal guaranty provides an additional layer of security for the franchisor, mitigating the risk associated with franchisees operating under a corporate structure.
Prospective Carbones Pizzeria franchisees should carefully review the guaranty form attached to the Franchise Agreement to fully understand the scope of their personal liability. They should also seek legal counsel to assess the implications of signing such a document. This is a standard practice in franchising, as it aligns the interests of the franchisee owners with the success of the business and the protection of the Carbones Pizzeria brand.