For Craters & Freighters, are all owners of the franchisee required to execute the Owner's Guaranty and Assumption of Obligations?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.1 Personal Guaranty. Each of the owners of Franchisee must execute the Owner's Guaranty and Assumption of Obligations set forth in Attachment E to this Agreement, pursuant to which all obligations and duties of Franchisee are guaranteed by such individuals. Franchisee and each such owner of Franchisee represent that the entity ownership percentages set forth in Attachment E to this Agreement are true, complete, accurate, and not misleading.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, each owner of the franchisee entity must execute the Owner's Guaranty and Assumption of Obligations. This document, found in Attachment E of the franchise agreement, ensures that all obligations and duties of the franchisee are guaranteed by these individuals.
This requirement means that each owner is personally responsible for the franchisee's performance and adherence to the franchise agreement. The FDD emphasizes that the ownership percentages listed in Attachment E must be accurate and not misleading.
For a prospective Craters & Freighters franchisee, this implies a significant legal and financial commitment from all owners. They are not only investing in the business but also guaranteeing its performance, which could put their personal assets at risk if the franchise fails to meet its obligations. This is a common practice in franchising, as it ensures that all owners have a vested interest in the success of the business and are accountable for its operations.