Does the Caring Transitions agreement specify the form of the principal's guarantee agreement?

According to Caring Transitions' 2025 Franchise Disclosure Document, if the franchisee is a limited liability business entity, each principal owner must execute a separate agreement, in a form prescribed by Caring Transitions, unconditionally guaranteeing the full payment of the franchisee's obligations under the agreement. They must also agree to be jointly and severally bound by all the provisions of the agreement, including the Covenants After Termination.

If the franchisee is not a limited liability business entity when initially signing the agreement, they have 90 days to transfer all interests in the franchised business to such an entity. The individuals who originally signed the agreement must maintain a controlling interest in the limited liability entity. One of these individuals must also act as the principal executive or manager and operating officer of the entity.

This requirement ensures that Caring Transitions has recourse to the personal assets of the principals behind the franchise entity, providing an additional layer of security for the franchisor. The guarantee agreement binds the principals to the franchise agreement's terms, including obligations that extend beyond the agreement's termination. Prospective franchisees should carefully review the form of guarantee agreement to understand the full scope of their personal liability.