What is the definition of 'Franchisee' according to the Cool Binz personal guaranty?

According to Cool Binz's 2025 Franchise Disclosure Document, the definition of 'Franchisee' in the context of the personal guaranty depends on the business structure of the franchisee. Specifically, if the franchisee is a corporation, each of the franchisee's shareholders and their spouses must execute the personal guaranty. If the franchisee is a partnership, each of the franchisee's general partners and their spouses must execute the undertaking. Lastly, if the franchisee is a limited liability company, each of the franchisee's members and managers and their spouses must execute the undertaking.

This requirement ensures that individuals with significant ownership or management roles in the Cool Binz franchise are personally liable for the franchise's obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default or breach of contract by the franchisee. The inclusion of spouses in the guaranty further strengthens this security, although it may raise concerns for the individuals involved due to the potential personal financial risk.

Prospective Cool Binz franchisees should carefully consider the implications of the personal guaranty, especially if they are operating under a corporate, partnership, or LLC structure. They should also seek legal and financial advice to fully understand the extent of their personal liability and the potential risks involved. It is important to note that the specific terms and conditions of the personal guaranty are outlined in Exhibit D to the Franchise Agreement, which franchisees should review thoroughly.