Who benefits from the Costa Vida Fresh Mexican Grill Guaranty?
Costa_Vida_Fresh_Mexican_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
You and each of your Owners represent, warrant and agree that Exhibit B is current, complete and accurate. You agree that an updated Exhibit B will be furnished promptly to us, so that Exhibit B (as so revised and signed by you) is at all times current, complete and accurate. Each person who is or becomes an Owner must sign a guaranty in the form we may choose to prescribe, undertaking to be jointly and severally by the terms of this Agreement, the current form of which is attached hereto as Exhibit C. Each person who is or becomes an Investor must sign an agreement in the form we prescribe, undertaking to be bound by the confidentiality and non-competition covenants contained in this Agreement, the current form of which is attached as Exhibit D. Each Owner and Investor must be an individual acting in his/her individual capacity, unless we waive this requirement.
Source: Item 23 — RECEIPTS (FDD pages 67–282)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, each person who is or becomes an Owner of a Costa Vida Fresh Mexican Grill franchise must sign a guaranty. The guaranty ensures that the Owner is jointly and severally bound by the terms of the Franchise Agreement. The current form of the guaranty is attached to the Franchise Agreement as Exhibit C.
This requirement means that Costa Vida Fresh Mexican Grill seeks to ensure that all individuals with a significant ownership stake (10% or more) in the franchise are personally liable for upholding the commitments outlined in the Franchise Agreement. This provides Costa Vida Fresh Mexican Grill with an additional layer of security, as they can pursue individual Owners for breaches of contract, unpaid fees, or other violations.
For a prospective Costa Vida Fresh Mexican Grill franchisee, this means that if you have Owners with 10% or more ownership in your franchise, they will be required to sign a personal guaranty, making them personally liable for the franchise's obligations. This is a common practice in franchising, as it protects the franchisor's interests and ensures that franchisees are fully committed to the success of the business and adherence to the franchise agreement.