What agreement must each owner of a Central Bark Doggy Day Care franchise execute, and what does it entail?
Central_Bark_Doggy_Day_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a Business Entity, each of your direct and indirect owners with a twenty percent (20%) or more ownership interest in you during the Term, and their spouses, will execute a guaranty in the form we prescribe undertaking personally to be bound, jointly and severally, by all provisions of this Agreement and any ancillary agreements between you and us. Our current form of guaranty is attached herein as Addendum 4. We confirm that a spouse who signs Addendum 4 solely in his or her capacity as a spouse (and not as an owner) is signing that agreement merely to acknowledge and consent to the execution of the guaranty by his or her spouse and to bind the assets of the marital estate as described therein and for no other purpose (including, to bind the spouse's own separate property).
Source: Item 1 — Franchisee shall have paid all Royalty Fees, advertising fund contributions, LAC contributions, amounts owed for purchases by Franchisee from Franchisor, or Franchisor's affiliates, and all other amounts owed to Franchisor, Franchisor's affiliates, and third-party creditors, and shall have submitted to Franchisor all required reports and statements; (FDD pages 106–233)
What This Means (2025 FDD)
According to Central Bark Doggy Day Care's 2025 Franchise Disclosure Document, if the franchisee is a business entity, each direct and indirect owner with a 20% or more ownership interest must execute a guaranty. This guaranty, in the form prescribed by Central Bark Doggy Day Care and attached as Addendum 4, requires the owners and their spouses to be personally bound, jointly and severally, by all provisions of the Franchise Agreement and any ancillary agreements between the franchisee and Central Bark Doggy Day Care.
This means that the personal assets of the owners (and potentially the marital assets) are at risk if the Central Bark Doggy Day Care franchise fails to meet its obligations under the Franchise Agreement. This is a significant commitment, as it extends personal liability for the business's debts and obligations to the franchisor. Spouses signing Addendum 4 are doing so to acknowledge consent to the execution of the guaranty by their spouse, and to bind the assets of the marital estate.
Such a requirement is relatively common in franchising, especially when dealing with business entities rather than individual franchisees. Franchisors often seek personal guarantees to ensure that there is a responsible party fully committed to the success of the franchise and to provide an additional layer of security for the franchisor. Prospective franchisees should carefully review the guaranty and understand the full extent of their personal liability before signing the Franchise Agreement.