What obligations do the owners personally assume and guarantee under the Guaranty for a Cicis franchise?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Your direct and indirect owners will be required to sign an agreement (the current form of which is attached as Attachment B to the Franchise Agreement and the Area Development Agreement) pursuant to which they each personally assume and guarantee your obligations under the Franchise Agreement and the Area Development Agreement (each a "Guaranty"). If the spouses of your owners are not themselves owners of you, we will require them to sign the Guaranty solely to acknowledge that you are signing it to bind yourself and any marital property. A non-owner spouse is not otherwise obligated under the Guaranty.
Source: Item 1 — The Franchisor and any Parents, Predecessors, and Affiliates (FDD pages 6–8)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, if the franchisee is not a natural person (i.e., a business entity), the direct and indirect owners are required to sign a Guaranty. This agreement stipulates that they personally assume and guarantee the franchisee's obligations under both the Franchise Agreement and the Area Development Agreement. This means that the personal assets of the owners could be at risk if the Cicis franchise fails to meet its financial or contractual obligations.
Spouses of the owners who are not themselves owners are also required to sign the Guaranty. However, their obligation is limited to acknowledging that the Guaranty binds the business entity and any marital property. The non-owner spouse is not otherwise obligated under the Guaranty, meaning their personal assets are not at risk beyond the marital property.
This requirement is a common practice in franchising, as it provides the franchisor with an additional layer of security. By having the owners personally guarantee the obligations, Cicis aims to ensure that the franchise is managed responsibly and that there is recourse in case of default. Prospective franchisees should carefully review the Guaranty and understand the full extent of their personal liability before signing the Franchise Agreement or Area Development Agreement.