What obligations are personally guaranteed by the individuals executing the personal guarantee for a Clear Pest Pros franchise?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
- b All general partners, members and all direct and indirect holders of an equity interest in the Franchisee shall, upon the legal entity's execution of this Agreement, execute an agreement personally guaranteeing to us the full payment and performance of the legal entity's obligations to us and undertaking to be bound, individually, jointly and severally, by all the terms of this Agreement including, without limitation, the restrictions on assignment contained herein.
The personal guaranty shall be in the form attached hereto as Exhibit A-3 or in such other form as we may from time to time prescribe.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to the 2025 Clear Pest Pros Franchise Disclosure Document, if the franchisee is a legal entity such as a partnership, LLC, or corporation, all general partners, members, and direct/indirect equity holders must execute an agreement personally guaranteeing the legal entity's obligations to Clear Pest Pros. This guarantee ensures full payment and performance of all the legal entity's obligations to Clear Pest Pros.
This personal guarantee extends to being individually, jointly, and severally bound by all terms of the Franchise Agreement. This includes, without limitation, the restrictions on assignment contained within the agreement. The personal guaranty will be in the form attached as Exhibit A-3 to the Franchise Agreement or in another form that Clear Pest Pros may prescribe from time to time.
In essence, Clear Pest Pros requires this personal guarantee to ensure that individuals with a significant stake in the franchisee entity are personally liable for the franchise's performance and adherence to the Franchise Agreement. This is a common practice in franchising to provide additional security to the franchisor and ensure the franchisee is fully committed to the business.