If the Guarantor is married, what acknowledgement is required from their spouse regarding the Cream franchise agreement?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned spouse of each Guarantor indicated below, acknowledges and consents to the guaranty given herein by his/her spouse. Such consent also serves to bind the assets of the marital estate to Guarantor's performance of this Guaranty. We confirm that a spouse who signs this Guaranty solely in his or her capacity as a spouse (and not as an owner) is signing merely to acknowledge and consent to the execution of the Guaranty by his or her spouse and to bind the assets of the marital estate as described therein and for no other purpose (including to bind the spouse's own separate property).
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, if a guarantor for a Cream franchise is married, the spouse must acknowledge and consent to the guaranty provided by their spouse. This acknowledgement serves to bind the assets of the marital estate to the guarantor's performance of the guaranty. Cream confirms that a spouse signing solely in their capacity as a spouse is doing so merely to acknowledge the execution of the guaranty by their spouse and to bind the marital estate's assets, and not to bind the spouse's separate property.
This requirement ensures that the franchisor, Cream, has recourse to the marital assets in the event the franchisee defaults on their obligations. It protects Cream by expanding the asset base available to satisfy any debts or liabilities arising from the franchise agreement. However, it also means that the spouse's assets could be at risk if the Cream franchise does not perform well.
Prospective franchisees should carefully consider the implications of this requirement and discuss it with their spouse and legal counsel. It's important for both spouses to understand the potential financial risks involved and to ensure that they are comfortable with the level of exposure to the marital assets. Franchisees should also inquire about the specific language and scope of the spousal consent to fully understand its implications.
Cream's approach is fairly standard in franchising, as franchisors often seek to secure guarantees that extend to marital assets to mitigate their risk. However, the specific terms and conditions can vary, so it's crucial to review the franchise agreement and related documents carefully.