Does the Guaranty and Non-Compete Agreement for Crave Cookies only cover obligations within the Franchise Agreement?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor agrees as follows:
- **1.
Guaranty.** Guarantor hereby unconditionally guarantees to Crave Cookies Franchising and its successors and assigns that Franchisee shall pay and perform every undertaking, agreement and covenant set forth in the Franchise Agreement and further guarantees every other liability and obligation of Franchisee to Crave Cookies Franchising, whether or not contained in the Franchise Agreement.
Guarantor shall render any payment or performance required under the Franchise Agreement or any other agreement between Franchisee and Crave Cookies Franchising upon demand from Crave Cookies Franchising.
Guarantor waives (a) acceptance and notice of acceptance by Crave Cookies Franchising of this Guaranty; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations of Franchisee; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right Guarantor may have to require that an action be brought against Franchisee or any other person or entity as a condition of liability hereunder; (e) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the execution of and performance under this Guaranty by the undersigned; (f) any law which requires that Crave Cookies Franchising make demand upon, assert claims against or collect from Franchisee or any other person or entity (including any other guarantor), foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Franchisee or any other person or entity (including any other guarantor) prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guaranty; and (g) any and all other notices and legal or equitable defenses to which Guarantor may be entitled.
- **2.
Confidential Information.** With respect to all Confidential Information Guarantor shall (a) adhere to all security procedures prescribed by Crave Cookies Franchising for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business; (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by Crave Cookies Franchising, (d) exercise the highest degree of diligence and make every effort to maintain the confidentiality of all such information during and after the term of the Franchise Agreement, (e) not copy or otherwise reproduce any Confidential Information, and (f) promptly report any unauthorized
disclosure or use of Confidential Information. Guarantor acknowledges that all Confidential Information is owned by Crave Cookies Franchising or its affiliates (except for Confidential Information which Crave Cookies Franchising licenses from another person or entity). Guarantor acknowledges that all customer data generated or obtained by Guarantor is Confidential Information belonging to Crave Cookies Franchising. This Section will survive the termination or expiration of the Franchise Agreement indefinitely.
3. Covenants Not to Compete.
- (a) Restriction In Term.
During the term of the Franchise Agreement, Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor.
- (b) Restriction Post Term.
For two years after the Franchise Agreement expires or is terminated for any reason (or, if applicable, for two years after a Transfer by Guarantor), Guarantor shall not directly or indirectly have any ownership interest in, lend money or provide financial assistance to, provide any services to, or be employed by, any Competitor located within five miles of Franchisee's Territory or the territory of any other Crave Cookies business operating on the date of termination or transfer, as applicable.
If the Franchise Agreement is terminated before the Territory is determined, then the area of non-competition will the Development Area and the territory of any other Crave Cookies business operating on the date of termination.
- (c) Interpretation.
Guarantor agrees that each of the foregoing covenants is independent of any other covenant or provision of this Guaranty or the Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, the Guaranty and Non-Compete Agreement extends beyond just the Franchise Agreement. The Guarantor's obligations include not only the agreements within the Franchise Agreement but also every other liability and obligation the franchisee owes to Crave Cookies, regardless of whether it's explicitly stated in the Franchise Agreement itself. This means any financial or performance-related commitment the franchisee makes to Crave Cookies is covered by the Guaranty.
This has significant implications for a prospective Crave Cookies franchisee because the guarantor (which is often a principal owner or investor) takes on a very broad responsibility. The guarantor's personal assets are at risk not only for the franchisee's adherence to the Franchise Agreement but also for any other debts or duties the franchisee incurs with Crave Cookies. This could include loans, supply agreements, or other contractual obligations.
The guarantor also agrees to adhere to confidentiality and non-compete terms, both during the franchise term and for a period afterward. Specifically, for two years after the Franchise Agreement expires or is terminated, the Guarantor cannot be involved with a competing business within five miles of the Crave Cookies location or any other Crave Cookies location operating at the time of termination. This restriction is independent of the Franchise Agreement itself, meaning a breach of the Guaranty can be enforced separately.
Furthermore, the Guaranty specifies that any disputes will be governed by Utah law and subject to the dispute resolution process outlined in the Franchise Agreement. The guarantor also waives several rights, including the right to require Crave Cookies to first pursue action against the franchisee before seeking recourse from the guarantor. This underscores the comprehensive and binding nature of the Guaranty and Non-Compete Agreement for anyone acting as a guarantor for a Crave Cookies franchise.