To what document is the guaranty attached for a Counselor Realty franchise?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is a partnership, corporation or other entity, all of its partners, shareholders or owners from time to time shall execute the guaranty at the foot of this Agreement.
not apply to, a transfer described in clause (iv) of the first sentence of this Section 9.1 if (x) such transfer (in a single transaction or series of related transactions) will not result in a change in Control of Franchisee or such direct or indirect owner of Franchisee, (y) you provide Counselor with written notice of such transfer, together with such other information concerning such transfer and transferee as we may require, at least thirty (30) days prior to the consummation of such transfer, and (z) if such transfer is a transfer of an ownership interest in Franchisee, such transferee executes the guaranty attached to this Agreement and delivers such guaranty to Counselor within ten (10) days of such transfer.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 24–25)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, if the franchisee is a partnership, corporation, or other entity, all of its partners, shareholders, or owners must execute the guaranty attached to the Franchise Agreement. This requirement ensures that individuals behind the business entity are personally liable for the franchise's obligations.
Additionally, in the event of a transfer of ownership interest in the Counselor Realty franchise, if the transfer does not result in a change of control of the franchisee, the transferee is required to execute the guaranty attached to the Franchise Agreement. This ensures that the new owner is also personally bound by the obligations of the franchise agreement.
This guaranty provides Counselor Realty with an additional layer of security, as it allows them to pursue the personal assets of the partners, shareholders, or owners if the franchise fails to meet its financial or contractual obligations. This is a common practice in franchising to protect the franchisor's interests and ensure the franchisee's commitment to the business.