If a Crave Cookies franchise is owned by an entity, what agreement must all owners of the business sign?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 1: The Franchisor and any Parents, Predecessors, and Affiliates]
Item 1
THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES
In this disclosure document, "we", "us," or "our" refers to Crave Cookies Franchising, LLC. "You" means the person to whom we grant a franchise. If you are a corporation, limited liability company, or other entity, each owner of the franchise entity must sign our Guaranty and Non-Compete Agreement, which means that all of the franchise agreement's provisions also will apply to your owners.
[Chunk 3 | Item 22: Contracts]
- 2.5 Guaranty. If Franchisee is an entity, then Franchisee shall have each Owner sign a personal guaranty of Franchisee's obligations to Crave Cookies Franchising, in the form of Attachment 3.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 33)
What This Means (2025 FDD)
According to the 2025 Crave Cookies Franchise Disclosure Document, if a franchisee is an entity, each owner must sign a personal guaranty. This guaranty ensures that the owners are personally liable for the entity's obligations to Crave Cookies Franchising. The specific form for this guaranty is included as Attachment 3 in the Franchise Agreement.
This requirement is a standard practice in franchising, as it provides the franchisor with additional security and recourse in case the franchisee entity fails to meet its financial or contractual obligations. By signing a personal guaranty, the owners of the entity agree to be held individually responsible for the debts and liabilities of the franchise.
Furthermore, each owner of the franchise entity must also sign Crave Cookies's Non-Compete Agreement, ensuring that all owners are bound by the non-compete provisions outlined in the franchise agreement. This prevents owners from engaging in competitive activities that could harm the Crave Cookies brand. This measure protects Crave Cookies's interests by preventing individuals with a vested interest in the franchise from simultaneously supporting or operating competing businesses, thus maintaining the integrity and focus of the franchise network.
Prospective franchisees should carefully review the personal guaranty and non-compete agreement with their legal counsel to fully understand the implications of signing these documents. They should also assess their personal financial situation and risk tolerance before committing to a franchise agreement that requires such personal guarantees.