Under which sections of the Chicken Guy Development Agreement and Franchise Agreement is the personal guarantee obligation detailed?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
| OBLIGATION | SECTION IN DEVELOPMENT AGREEMENT (DA) FRANCHISE AGREEMENT (FA) AND NON-TRADITIONAL LOCATION ADDENDUM (NTA) | DISCLOSURE DOCUMENT ITEM | |
|---|---|---|---|
| y. | Personal Guarantee | DA: Section 8.F. FA: Section 17.F. NTA: Not applicable | Not Applicable |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 25–34)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the personal guarantee obligation is detailed in Section 8.F of the Development Agreement and Section 17.F of the Franchise Agreement. This information is presented in a table format within Item 11 of the FDD, which outlines various obligations and their corresponding sections in the relevant agreements. The Non-Traditional Location Addendum does not apply to the personal guarantee obligation.
For prospective Chicken Guy franchisees, this means that if you sign a Development Agreement or Franchise Agreement, you will likely be required to provide a personal guarantee. A personal guarantee means that you are personally liable for the financial obligations of the franchise, even if your franchise is set up as a corporation or LLC. This could put your personal assets at risk if the franchise fails to meet its financial obligations.
It is important for potential franchisees to carefully review these sections of the Development Agreement and Franchise Agreement with a legal professional to fully understand the extent of their personal liability. Understanding the terms of the personal guarantee is crucial before signing any franchise agreement to avoid potential financial risks.