Does the Cool Binz franchise agreement specify that the personal guaranty extends to 'any other agreement' between the franchisee and franchisor?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
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- in the case of an installment sale, a transaction where Franchisee provides financing to transferee, transferee pays Franchisee via a promissory note or other structured payment plan, Franchisee must continue to guarantee performance and all payment obligations to Franchisor under this Agreement until the final closing of the installment sale or final payment of such structured payment arrangement;
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- if you finance any part of the sale price of the transferred interest, then (a) you agree and will assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay Royalties, Brand Marketing Fees, and other amounts due to us and otherwise to comply with this Agreement, (b) you will not hold any security interest reserved in the business, and (c) you will enter into a comfort letter assuring us that the transferee will meet its obligations under the Franchise Agreement, and reaffirming your guaranty of the Franchise Agreement;
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
Based on the 2025 Cool Binz Franchise Disclosure Document excerpts provided, it's not explicitly stated whether the personal guaranty extends to 'any other agreement' between the franchisee and franchisor. However, the FDD does mention the personal guaranty in the context of transferring the franchise. Specifically, if the franchisee finances any part of the sale price, they must reaffirm their guaranty of the Franchise Agreement.
Additionally, the FDD states that in the case of an installment sale, where the franchisee provides financing to the transferee, the franchisee must continue to guarantee performance and all payment obligations to the franchisor under the agreement until the final closing of the installment sale or final payment of such structured payment arrangement. This implies that the personal guaranty is tied to the franchisee's obligations under the franchise agreement itself.
To fully understand the scope of the personal guaranty, a prospective Cool Binz franchisee should carefully review the specific language in the franchise agreement and personal guaranty document. It would be prudent to seek legal counsel to clarify whether the guaranty extends beyond the franchise agreement to cover any other agreements that may exist between the franchisee and Cool Binz.