What exhibit in the Franchise Agreement is the 'Guaranty and Assumption of Obligations' for a Chem-Dry franchise?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
If you are a corporation, limited liability company, partnership, or other entity, each of your owners, members, shareholders, partners, or officers must personally guaranty your obligations under the Franchise Agreement and agree to be bound personally by every contractual provision, whether containing monetary or non-monetary obligations, including the covenant not to compete. This "Guaranty and Assumption of Obligations" is Exhibit B of the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 50–51)
What This Means (2024 FDD)
According to the 2024 Chem-Dry Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, partnership, or other entity, each owner, member, shareholder, partner, or officer must personally guarantee the obligations under the Franchise Agreement. They must also agree to be bound personally by every contractual provision, whether containing monetary or non-monetary obligations, including the covenant not to compete.
The document specifies that this 'Guaranty and Assumption of Obligations' is detailed in Exhibit B of the Franchise Agreement. This means that individuals associated with the franchisee entity are committing to uphold the financial and operational responsibilities outlined in the agreement.
For a prospective Chem-Dry franchisee, this implies that if the business is not owned directly by an individual, the individuals behind the business entity (e.g., the owners of a corporation) must also sign onto the agreement personally. This ensures that Chem-Dry has recourse to the personal assets of the business owners should the franchise fail to meet its obligations. This is a fairly standard practice in franchising, as it provides an extra layer of security for the franchisor.