What is the implication of signing a personal guaranty for a Carbones Pizzeria franchise?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, if the franchisee is a corporation, partnership, limited liability company, or other business entity, each of the franchisee's owners must sign a personal guaranty. This guaranty ensures that the owners personally agree to comply with all the provisions outlined in the Franchise Agreement.

In practical terms, this means that the personal assets of the owners could be at risk if the Carbones Pizzeria franchise fails to meet its obligations under the Franchise Agreement. This could include financial obligations, adherence to operational standards, or any other requirements specified in the agreement. The personal guaranty essentially makes the owners personally liable for the business's debts and responsibilities to Carbones Pizzeria.

Personal guarantees are a common practice in franchising, especially when the franchisee is a business entity rather than an individual. Franchisors like Carbones Pizzeria use them to ensure that there is a direct line of accountability and to provide an additional layer of security for the franchisor. Prospective franchisees should carefully review the Franchise Agreement and understand the full extent of their obligations before signing a personal guaranty, as it can have significant financial implications.