Are the Principals of the entity that executes the Caring Transitions agreement also bound by the agreement?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.11 "Franchisee" Defined. The term "Franchisee" includes all persons who succeed to the interest of the original Franchisee by permitted transfer or operation of law, and will be deemed to include not only the individuals or entity defined as the "Franchisee" on the attached Exhibit A, but also all Principals of the entity that executes this agreement. By signing this agreement, each of the Principals of the entity that executes this agreement as Franchisee acknowledges and accepts the duties and obligations imposed upon each of them, individually, by this agreement. All Principals of the entity that executes this agreement must, by separate agreement, personally guarantee all of Franchisee's obligations to Franchisor. If two or more individuals are the "Franchisee" under this agreement, their liability to Franchisor is joint and several.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions's 2025 Franchise Disclosure Document, the principals of the entity that executes the franchise agreement are indeed bound by the agreement. The term 'Franchisee' is defined to include not only the individuals or entity defined as the 'Franchisee' on the attached Exhibit A, but also all Principals of the entity that executes the agreement.
By signing the agreement, each of the Principals of the entity that executes the agreement as Franchisee acknowledges and accepts the duties and obligations imposed upon each of them, individually, by this agreement. Furthermore, all Principals of the entity that executes this agreement must, by separate agreement, personally guarantee all of Franchisee's obligations to Franchisor.
This means that the franchisor, Caring Transitions, holds the principals of the franchisee entity personally responsible for upholding the terms of the franchise agreement. This is a common practice in franchising to ensure that the franchisor has recourse to the personal assets of the principals should the franchisee entity fail to meet its obligations. If two or more individuals are the 'Franchisee' under this agreement, their liability to Franchisor is joint and several.