What is the meaning of 'personally' guarantee in the context of the Cinnaholic Guaranty Agreement?

Based on the 2025 Cinnaholic Franchise Disclosure Document, the term 'personally' in the context of the Personal Covenants means that certain 'Bound Parties' of the franchisee must agree to be individually liable for specific obligations under the Franchise Agreement. According to Section 20.4, as a condition for the Franchise Agreement to take effect, each Bound Party must sign and deliver the Personal Covenants (Exhibit B) to Cinnaholic, thereby agreeing to be personally bound by the provisions outlined in Sections 20.1, 20.2, and 20.3 of the agreement. This ensures that these individuals are directly responsible for upholding those sections of the agreement.

This requirement has significant implications for prospective Cinnaholic franchisees. If there are multiple owners or managing members, Cinnaholic requires each 'Bound Party' to assume individual responsibility for compliance with specific sections of the Franchise Agreement. This means that if the franchisee entity fails to meet its obligations under Sections 20.1, 20.2, and 20.3, Cinnaholic can pursue legal action directly against the Bound Parties, holding them personally liable for the breach.

The FDD also states that if there are any changes in the identity of any Bound Party while the Agreement is in effect, the franchisee must promptly notify Cinnaholic and ensure that the new Bound Party signs and delivers the Personal Covenants. This provision ensures that Cinnaholic maintains a consistent level of personal guarantee throughout the term of the agreement, regardless of changes in the franchisee's ownership or management structure. Prospective franchisees should carefully review Exhibit B and Sections 20.1, 20.2, and 20.3 to fully understand the scope of the personal obligations they will be undertaking.