May a landlord require a personal guaranty from the Crepe De Licious franchisee?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
(n) your landlord must consent to transfer the lease to the proposed transferee;
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
Based on the 2025 Crepe De Licious Franchise Disclosure Document, a landlord's consent is required to transfer the lease to a proposed transferee. While the FDD does not explicitly state that a landlord can require a personal guaranty from the franchisee, it does state that the landlord must consent to the transfer of the lease.
This implies that the landlord has the power to set conditions for the lease transfer. It is standard practice in commercial leasing for landlords to request personal guarantees, especially from new or smaller business entities. This provides the landlord with an additional layer of financial security, ensuring that there is a personal obligation to fulfill the lease terms, even if the business entity fails.
Therefore, while not directly mentioned, it is reasonable to assume that a landlord could potentially require a personal guarantee as a condition of consenting to the lease, which is necessary for a transfer. A prospective Crepe De Licious franchisee should clarify this potential requirement with the franchisor and be prepared to negotiate lease terms with landlords, understanding that a personal guarantee might be a condition of securing the location.