What form must the personal guaranty of a Chocolate Bash franchisee's obligations be in?

According to the 2024 Chocolate Bash Franchise Disclosure Document, if the franchisee is an entity, each owner must sign a personal guaranty of the franchisee's obligations to Chocolate Bash. This guaranty must be in the form of Attachment 3 to the Franchise Agreement.

In practical terms, this means that if a franchisee is a corporation, LLC, or other business entity rather than an individual, each individual or entity that owns a stake in the franchisee company must personally guarantee that the franchisee will meet its financial and contractual obligations to Chocolate Bash. This protects Chocolate Bash by ensuring that there are individuals who are personally liable if the franchisee entity fails to perform its duties under the Franchise Agreement.

The specific form of the guaranty is standardized as Attachment 3 to the Franchise Agreement. This likely includes specific legal language and provisions designed to ensure the guaranty is enforceable. A prospective franchisee should carefully review Attachment 3 with legal counsel to fully understand the scope of the personal guarantee and the potential liabilities it creates for the owners. Franchisees should pay close attention to the conditions under which the guaranty can be invoked and the assets that could be at risk.