Who is responsible for the costs incurred by CB Franchising in enforcing the Chocolate Bash Guaranty?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
mary Page, then the Location will be determined in accordance with Section 6.1.
- "Losses" includes (but is not limited to) all losses; damages; fines; charges; expenses; lost profits; reasonable attorneys' fees; travel expenses, expert witness fees; court costs; settlement amounts; judgments; loss of CB Franchising's reputation and goodwill; costs of or resulting from delays; financing; costs of advertising material and media time/space and the costs of changing, substituting or replacing the same; and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described.
- "Manual" means CB Franchising's confidential Operating Manual(s), including any supplements, additions, or revisions from time to time, which may be in any form or media.
Source: Item 22 — CONTRACTS (FDD pages 38–39)
What This Means (2024 FDD)
Based on the 2024 Chocolate Bash Franchise Disclosure Document, the definition of "Losses" includes reasonable attorney's fees, court costs, and judgments. If a franchisee is an entity, each owner must sign a personal guaranty, making them responsible for the franchisee's obligations to CB Franchising. Therefore, the guarantor is responsible for the costs incurred by CB Franchising in enforcing the Chocolate Bash Guaranty.
This means that if Chocolate Bash incurs losses, including legal fees, while enforcing the guaranty against an owner, the owner is responsible for covering those costs. This is a significant financial responsibility for the guarantor.
A prospective Chocolate Bash franchisee should carefully consider the implications of the personal guaranty and ensure they understand the full extent of their financial obligations. It is advisable to consult with a legal and financial professional to fully understand the risks associated with signing a personal guaranty.