For the Guarantor(s) of a Chatime franchise, what signature is required?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) When the assignee is a company, those directors and shareholders or other Affiliates of the assignee nominated by Franchisor each:
- (a) Executed and deliver a personal guarantee and indemnity and undertake similar personal restraints to those given by Guarantor under this Agreement in favor of, and in the form attached as Exhibit 3;
- (b) Executed and deliver a confidentiality and non-competition agreement in the form attached as Exhibit 4; and
- (c) Execute the new franchise agreement or assignment in their personal capacities;
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to the 2025 Chatime Franchise Disclosure Document, when an assignee of a Chatime franchise is a company, certain individuals associated with the assignee must execute specific documents. These individuals are the directors and shareholders or other Affiliates of the assignee nominated by Chatime.
Specifically, these nominated individuals must execute and deliver a personal guarantee and indemnity, undertaking similar personal restraints to those given by the Guarantor under the Franchise Agreement, using the form attached as Exhibit 3. They must also execute and deliver a confidentiality and non-competition agreement, using the form attached as Exhibit 4. Furthermore, these individuals must execute the new franchise agreement or assignment in their personal capacities.
In essence, Chatime requires that certain individuals associated with a corporate assignee personally commit to the obligations and restrictions outlined in the franchise agreement, ensuring that the franchisor has recourse to individuals, not just the corporate entity, in case of default or breach of contract. This is a common practice in franchising to provide additional security to the franchisor.