Does the personal guarantee for a Casiola franchise waive the right to require action against the franchisee before pursuing the guarantor?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
If Franchisee is, at any time, a Corporate Entity, Franchisee agrees that each Owner shall execute, sign and deliver to Franchisor the Franchise Owner Agreement and Guaranty attached to this Agreement as Exhibit 1 and, in doing so, among other things, will individually, jointly, and severally, guarantee Franchisee's obligations under this Agreement and personally bind themselves to confidentiality and non-competition covenants and restrictions.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
Based on the 2024 Casiola Franchise Disclosure Document, the franchise agreement includes a personal guaranty. Specifically, if the franchisee is a corporation, each owner must sign a Franchise Owner Agreement and Guaranty. By signing this agreement, the owner guarantees the franchisee's obligations under the Franchise Agreement. They also agree to be personally bound to confidentiality and non-competition covenants and restrictions.
However, the FDD does not explicitly state whether this personal guarantee includes a waiver of the right to require action against the franchisee before pursuing the guarantor. This means the document does not specify if Casiola can pursue the guarantor directly without first attempting to recover from the franchisee.
A prospective Casiola franchisee should clarify with Casiola whether the personal guarantee contains a clause that allows Casiola to proceed directly against the guarantor without first pursuing the franchisee. This clarification is crucial to understanding the full extent of the guarantor's liability.