What agreement must the City Publications franchisee and its equity owners execute and deliver to the franchisor?

According to City Publications' 2025 Franchise Disclosure Document, any individual or entity holding a legal or beneficial interest of five percent (5%) or greater in the franchisee company must execute the Guaranty and Assumption of Obligations agreement. This agreement is included as Exhibit B to the franchise agreement and is incorporated by reference into the main agreement.

In practical terms, this means that if a franchisee is a corporation, LLC, or partnership, any owner with a significant stake (5% or more) must personally guarantee the franchisee's obligations under the franchise agreement. This is a common practice in franchising, as it ensures that the franchisor has recourse to the personal assets of the owners if the franchisee entity defaults on its obligations.

The Guaranty and Assumption of Obligations agreement essentially makes these equity holders personally liable for the franchisee's debts and other obligations to City Publications. This could include unpaid royalties, advertising fees, or damages resulting from a breach of the franchise agreement. Prospective franchisees should carefully review Exhibit B and understand the full extent of the obligations they and their equity holders will be assuming.

City Publications requires this agreement to protect its interests and ensure the franchisee adheres to the franchise agreement terms. This requirement is designed to provide an additional layer of security for City Publications, knowing that individuals with a vested financial interest are also personally committed to the success and compliance of the franchise.