Does the Cool Binz franchise agreement specify any geographic limitations on the applicability of the personal guaranty?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
The 2025 Cool Binz Franchise Disclosure Document states that all general partners, members, and direct/indirect equity holders must execute an agreement personally guaranteeing the legal entity's obligations to Cool Binz. This guaranty ensures full payment and performance of all obligations under the franchise agreement. The personal guaranty is in the form attached as Exhibit D or another form that Cool Binz may prescribe.
The FDD does not specify any geographic limitations on the applicability of the personal guaranty. This means the personal guaranty likely extends to all obligations under the Franchise Agreement, regardless of where the franchisee's business activities occur. The absence of geographic limitations in the personal guaranty could have significant implications for franchisees.
Without any geographic limitations, the personal guaranty could expose the franchisee's personal assets to risk, even for business activities or liabilities that arise outside of their primary territory. Prospective franchisees should carefully review the terms of the personal guaranty (Exhibit D) and seek legal counsel to fully understand the scope of their personal liability under the Cool Binz franchise agreement.