What must Chocolate Fish Franchising do in order to receive the Guaranty?

According to the 2024 Franchise Disclosure Document, if a Chocolate Fish Coffee franchisee is a business entity, Chocolate Fish Franchising requires each owner of the franchisee to sign a personal guaranty. This guaranty, using the form provided as Attachment 3 in the FDD, ensures that the owners personally guarantee the franchisee's obligations to Chocolate Fish Franchising.

The personal guaranty means that the owner(s) are on the hook if the Chocolate Fish Coffee franchise fails to meet its financial or contractual obligations. This is a common practice in franchising, as it provides the franchisor with an additional layer of security beyond the assets of the business entity itself. The guarantor agrees to ensure the franchisee pays and performs every obligation outlined in the Franchise Agreement, as well as any other liabilities the franchisee owes to Chocolate Fish Franchising.

The guarantor also waives several rights, including the right to require Chocolate Fish Franchising to first pursue action against the franchisee before seeking recourse from the guarantor. This means Chocolate Fish Franchising can directly pursue the guarantor for any payment or performance required under the Franchise Agreement. The guaranty is governed by Wyoming law, and the dispute resolution provisions of the Franchise Agreement are incorporated into the guaranty, meaning any disputes related to the guaranty will be subject to the same dispute resolution process outlined in the franchise agreement.