Under the Carvel Guaranty, what is the definition of 'Guarantor'?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS GUARANTY (the "Guaranty") is made by the undersigned individuals (whether one or more, jointly and severally, the "Guarantor"), in favor of Carvel Franchisor SPV LLC, a Delaware limited liability company ("Franchisor").
- B. Guarantor is an owner of Franchisee and anticipates benefitting from the operation of a franchise pursuant to the Franchise Agreement. Guarantor is, therefore, willing to sign this Guaranty. Guarantor acknowledges having read and understood the terms and conditions of the Franchise Agreement.
- C. Franchisor would not have agreed to enter into the Franchise Agreement without this Guaranty.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Guarantor is defined as the undersigned individuals making the Guaranty, whether one or more, jointly and severally, in favor of Carvel Franchisor SPV LLC. The Guarantor is typically an owner of the Franchisee who anticipates benefiting from the operation of the franchise and is willing to sign the Guaranty. Carvel would not agree to enter into the Franchise Agreement without this Guaranty.
In practical terms, this means that if you are an owner of the Carvel franchise entity, you will likely be required to personally guarantee the obligations of the franchise to Carvel. This personal guarantee ensures that Carvel has recourse to the personal assets of the owner(s) if the franchise fails to meet its financial or other obligations under the Franchise Agreement.
Prospective franchisees should carefully consider the implications of signing a personal guarantee, as it puts their personal assets at risk. It is advisable to seek legal counsel to fully understand the scope and potential consequences of the Guaranty before signing the Franchise Agreement. Franchisees should also note that the Guaranty is governed by Georgia law, but may be subject to the laws of the state in which the franchised business is located under certain conditions.