Under the Cinnaholic Franchise Agreement, what is being personally, absolutely, and unconditionally guaranteed?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| ("Franchisor") of that certain Cinnaholic | Franchise Agreement, | dated , 20 (as the same |
|---|---|---|
| from time to time may be amended, | modified, extended or renewed, | the "Franchise Agreement"), by and |
| between | ("Franchisee") | the |
| and | undersigned, for the | |
| Franchisor, | term of the | |
| Franchise Agreement and any | extension or renewal thereof, and | thereafter until all obligations of Franchisee to Franchisor have been satisfied, jointly and severally, do hereby personally, absolutely, and unconditionally guarantee that Franchisee shall punctually pay and perform each and every undertaking, |
| condition, and covenant set forth in the Franchise Agreement. |
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, franchisees are required to personally, absolutely, and unconditionally guarantee that the franchisee will punctually pay and perform each and every undertaking, condition, and covenant set forth in the Franchise Agreement. This obligation extends for the term of the Franchise Agreement and any extensions or renewals, continuing until all obligations of the franchisee to Cinnaholic have been satisfied.
This guarantee means that the franchisee is personally liable for all financial and operational obligations outlined in the Franchise Agreement. This includes, but is not limited to, the payment of fees, adherence to operational standards, and fulfillment of contractual responsibilities. The use of the terms "personally, absolutely, and unconditionally" emphasizes the comprehensive and non-negotiable nature of this guarantee.
For a prospective Cinnaholic franchisee, this requirement represents a significant personal financial risk. If the franchise fails to meet its financial obligations or breaches the Franchise Agreement, the franchisee's personal assets could be at risk. This is a common practice in franchising, as it provides the franchisor with added security and assurance that the franchisee is fully committed to the business. Franchisees should carefully consider this personal guarantee and its potential implications before entering into a franchise agreement with Cinnaholic.