Does the Cream Guaranty require the Guarantor to engage in specific activities?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
-|---|---|---| | Marks, unless we direct you otherwise in connection with our exercise of our option to purchase | | | |
ATTACHMENT D TO FRANCHISE AGREEMENT
GUARANTY AND ASSUMPTION OF OBLIGATIONS
THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given by each of the undersigned persons indicated below who have executed this Guaranty (each a "Guarantor") to be effective as of the Effective Date of the Agreement (defined below).
In consideration of, and as an inducement to, the execution of that certain Franchise Agreement (the "Agreement") on this date by Jeni's Splendid Ice Creams Franchise, LLC ("us," "we," or "our"), each Guarantor personally and unconditionally (a) guarantees to us and our successors and assigns, for the term of the Agreement and afterward as provided in the Agreement, that ________________________________________ ("Franchise Owner") will punctually pay and perform each and every undertaking, agreement, and covenant set forth in the Agreement and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including the non-competition, confidentiality, and transfer requirements.
Each Guarantor consents and agrees that: (1) Guarantor's direct and immediate liability under this Guaranty will be joint and several, both with Franchise Owner and among other guarantors; (2) Guarantor will render any payment or performance required under the Agreement upon demand if Franchise Owner fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchise Owner or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which we may from time to time grant to Franchise Owner or to any other person, including the acceptance of any partial payment or performance or the compromise or release of any claims, or any amendment, waiver or restatement to any terms of the Agreement, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement; and (5) at our request, each Guarantor shall present updated financial information to us as reasonably necessary to demonstrate such Guarantor's ability to satisfy the financial obligations of Franchise Owner under the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Guaranty requires the Guarantor to be personally bound by the franchise agreement and liable for any breaches. This includes both monetary obligations and the obligation to take or refrain from specific actions or activities. These activities include non-competition, maintaining confidentiality, and adhering to transfer requirements outlined in the franchise agreement.
Specifically, the Guarantor must provide payment or performance if the Area Developer or Franchise Owner fails to do so. This liability is not contingent upon Cream pursuing remedies against the Area Developer, Franchise Owner, or any other person. The Guarantor's obligations remain even if Cream grants extensions of time, credit, or other indulgences to the Area Developer or Franchise Owner. The Guaranty remains in effect during the term of the agreement.
Furthermore, if the Area Developer or Franchise Owner is delinquent in payments, a Guarantor that is a business entity, retirement or investment account, or trust cannot make dividends or distributions to its owners, accountholders, or beneficiaries while the delinquency persists, unless prohibited by law. At Cream's request, the Guarantor must also provide updated financial information to demonstrate their ability to meet the financial obligations of the Area Developer or Franchise Owner under the agreement.