Which exhibit in the Cool Binz Franchise Agreement outlines the Personal Guaranty obligation?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
Copies of such documents and of resolutions of the legal entity's board of directors or managers authorizing its entry into this Agreement shall be furnished to us upon request.
- b All general partners, members and all direct and indirect holders of equity interest 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 D or in such other form as we may from time to time prescribe.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 34–35)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, the personal guaranty is outlined in Exhibit D of the Franchise Agreement. Specifically, Exhibit D is titled "PERSONAL GUARANTY AND GUARANTY OF SPOUSES." This exhibit is relevant if the franchisee is a corporation, partnership, or limited liability company. In each of these cases, shareholders, general partners, members, and managers, along with their spouses, must execute the undertaking.
This requirement means that individuals associated with the franchisee entity (and their spouses) are personally guaranteeing the financial and operational obligations of the franchise. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the franchisee fails to meet its obligations under the Franchise Agreement. The personal guaranty ensures that the franchisor can seek payment or compliance from the personal assets of the individuals involved, not just the business assets of the franchisee entity.
Prospective Cool Binz franchisees should carefully review Exhibit D and understand the full extent of their personal obligations before signing the Franchise Agreement. They should also seek legal counsel to fully understand the implications of providing a personal guaranty. This includes understanding what assets are at risk and what circumstances could trigger the guaranty. Franchisees should also be aware that the personal guaranty extends to their spouses, who must also sign the agreement.