Besides the Franchise Agreement, what other agreement must each individual who owns an interest in the franchisee entity sign for a Craters & Freighters franchise?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The individuals signing for me constitute all of the executive officers, partners, shareholders, investors and/or principals. Each of such individuals has reviewed the Franchise Disclosure Document and all exhibits and carefully read, discussed, understands and agrees to the Franchise Agreement, each attached written Addendum and any personal guaranties.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 35–36)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, in addition to the Franchise Agreement, each individual who owns an interest in the franchisee entity must sign personal guaranties. This requirement ensures that all owners are personally liable for the franchise's obligations under the Franchise Agreement.
This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default or breach of contract. By signing a personal guaranty, the owner(s) of the franchise are held directly responsible for the performance of the franchise, regardless of the business's legal structure (e.g., corporation or LLC).
Prospective Craters & Freighters franchisees should carefully review the terms of the personal guaranty with legal counsel to fully understand the extent of their personal liability. They should also assess their financial situation and risk tolerance before signing such an agreement, as it could have significant implications for their personal assets and creditworthiness.