What form is used for the guaranty required by Cream?

According to Cream's 2025 Franchise Disclosure Document, if the franchisee is a legal business entity, each direct and indirect owner with a 10% or greater ownership interest must execute a guaranty. This guaranty is required to ensure that the owners are personally bound by all provisions of the Franchise Agreement and any related ancillary agreements between the franchisee and Cream. The spouse of any owner who is an individual must also provide written consent to the owner's execution of the guaranty.

The specific form of guaranty that Cream uses is attached as Attachment D to the Franchise Agreement. This attachment includes a Guaranty and Assumption of Obligations, which is given by each person executing the Guaranty, referred to as a Guarantor. The Guarantor agrees to be personally bound by and liable for any breaches of the Franchise Agreement, including monetary obligations and specific actions or activities outlined in the agreement.

This requirement ensures that Cream has recourse to the personal assets of the owners of the franchise entity, providing an additional layer of security for Cream. It is a common practice in franchising to require personal guarantees, especially from owners with significant equity, to ensure commitment to the franchise and protect the franchisor's interests. Prospective franchisees should carefully review Attachment D and understand the full extent of their personal obligations under the guaranty before signing the Franchise Agreement.