What form does the personal guaranty take for a Chocolate Bash franchise?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to CB Franchising, in the form of Attachment 3.
---#### Attachment 3 to Franchise Agreement
GUARANTY AND NON-COMPETE AGREEMENT
This Guaranty and Non-Compete Agreement (this "Guaranty") is executed by the undersigned person(s) (each, a "Guarantor") in favor of Chocolate Bash Franchising, LLC, a Wyoming limited liability company ("CB Franchising").
- **2.
Confidential Information.** With respect to all Confidential Information Guarantor shall (a) adhere to all security procedures prescribed by CB Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by CB Franchising, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized disclosure or use of Confidential Information.
Guarantor acknowledges that all Confidential Information is owned by CB Franchising or its affiliates (except for Confidential Information which CB Franchising licenses
from another person or entity). Guarantor acknowledges that all customer data generated or obtained by Guarantor is Confidential Information belonging to CB Franchising. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor.
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, or be engaged or employed by, any Competitor located within five miles of Franchisee's Territory or the territory of any other Chocolate Bash business operating on the date of termination or transfer, as applicable.
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
If all or any portion of the covenants in this Section is held to be unenforceable or unreasonable by any court, then the parties intend that the court modify such restriction to the extent reasonably necessary to protect the legitimate business interests of CB Franchising.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
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 CB Franchising. This guaranty must be in the form of Attachment 3 to the Franchise Agreement.
Attachment 3 is titled "Guaranty and Non-Compete Agreement" and is executed by each owner in favor of Chocolate Bash Franchising, LLC. This agreement not only covers the guaranty of the franchisee's obligations but also includes a non-compete agreement. The guarantor must adhere to security procedures for maintaining confidentiality, disclose confidential information only to employees as necessary, and avoid using such information in any other business. The guarantor also acknowledges that all customer data generated is confidential information belonging to Chocolate Bash.
The non-compete covenants restrict the guarantor from having any ownership interest in, or being employed by, any competitor during the term of the Franchise Agreement. For two years after the agreement expires or is terminated, the guarantor is restricted from involvement with any competitor within five miles of the franchisee's territory or any other Chocolate Bash business. These covenants are independent, and the parties intend for a court to modify any portion deemed unenforceable to protect Chocolate Bash's legitimate business interests.