Does the Chocolate Bash Franchise Agreement include a Guaranty agreement as part of the exhibit?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
hall promptly designate a new Principal Executive, subject to CB Franchising's reasonable approval.
- 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.
- 2.6 No Conflict. Franchisee represents to CB Franchising that Franchisee and each of its Owners (i) are not violating any agreement (including any confidentiality or non-competition
covenant) by entering into or performing under this Agreement, (ii) are not a direct or indirect owner of
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
According to the 2024 Chocolate Bash Franchise Disclosure Document, the Franchise Agreement does include a Guaranty agreement as part of its exhibits. Specifically, if the franchisee is an entity, each owner must sign a personal guaranty of the franchisee's obligations to Chocolate Bash, and this guaranty is included as Attachment 3 to the Franchise Agreement. This attachment is titled "GUARANTY AND NON-COMPETE AGREEMENT".
This means that if a franchisee is a corporation or LLC, the franchisor, Chocolate Bash, requires each owner to personally guarantee the entity's obligations under the Franchise Agreement. This is a common practice in franchising, as it ensures that individuals with a stake in the business are personally liable for the franchise's performance and adherence to the agreement terms. The Guaranty and Non-Compete Agreement also includes covenants not to compete, restricting the guarantor from engaging with any competitor during the term of the agreement and for a period of two years after the agreement expires or is terminated.
Prospective franchisees should carefully review the Guaranty and Non-Compete Agreement (Attachment 3) and understand the full extent of their personal obligations and restrictions. They should also be aware of the implications of signing a personal guarantee, as it could put their personal assets at risk if the franchise fails to meet its financial or contractual obligations. It is advisable to seek legal counsel to fully understand the terms and conditions of the guaranty before signing the Franchise Agreement.