What agreement must each principal of a Caring Transitions franchisee execute?

According to Caring Transitions' 2025 Franchise Disclosure Document, each principal of a franchisee must execute a separate agreement. This agreement, in a form prescribed by Caring Transitions, unconditionally guarantees the full payment of the franchisee's obligations under the Franchise Agreement.

Furthermore, by signing this agreement, the principal agrees to be jointly and severally bound by all the provisions outlined in the Franchise Agreement. This includes adherence to the Covenants After Termination, which typically involve restrictions on operating a similar business within a specified distance of the franchisee's territory after the franchise agreement ends.

This requirement ensures that Caring Transitions has recourse to the personal assets of the franchisee's principals should the franchisee fail to meet its financial obligations. It also binds the principals to the non-compete and confidentiality clauses, protecting Caring Transitions' interests even if the franchisee itself ceases to operate. This is a common practice in franchising, as it provides an additional layer of security for the franchisor and helps to maintain the integrity of the franchise system.

Prospective franchisees should carefully review the terms of this agreement and understand the full extent of their personal liability. They should also consult with an attorney to ensure they fully understand the implications of signing such a guarantee.