What obligations are covered by the guaranty for a Clean Your Dirty Face franchise?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a corporation, limited liability company, or partnership, your direct and indirect owners must personally guarantee your obligations under the Franchise Agreement and agree to be bound personally by every contractual provision, whether containing monetary or nonmonetary obligations, including the covenant not to compete. This "Guaranty and Assumption of Obligations" is attached as Exhibit D to the Franchise Agreement. In addition, if these owners are married, their spouse may have to consent in writing to their signing of the guaranty.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 43)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, the direct and indirect owners must personally guarantee the franchisee's obligations under the Franchise Agreement. This means the owners are personally responsible for ensuring the business meets all requirements outlined in the agreement.
The guaranty extends to every contractual provision, encompassing both monetary and nonmonetary obligations. This includes, but is not limited to, financial obligations like paying royalties or adhering to operational standards detailed in the Franchise Agreement. The owners are also bound by the covenant not to compete, which restricts them from engaging in similar businesses during and sometimes after the franchise term.
Clean Your Dirty Face requires this guaranty to ensure that the owners are fully committed to the success and compliance of the franchise. It also provides Clean Your Dirty Face with additional security, as they can pursue the owners' personal assets if the franchise fails to meet its obligations. Furthermore, if the owners are married, their spouse may have to consent in writing to their signing of the guaranty, indicating the significant legal and financial implications involved. This is a fairly standard practice in franchising, as it aligns the interests of the franchisor and the franchisee's ownership.