What obligations are guaranteed by the Owners Agreement for a Crepe De Licious franchise?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are an entity, each owner (i.e., each person holding an ownership interest in you) must sign an Owners Agreement guarantying the obligations of the entity in the form of which is attached to the Franchise Agreement as Attachment C. We also require that the spouses of the Franchise owners sign the Owners Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, if the franchisee is an entity, each owner must sign an Owners Agreement. This agreement guarantees the obligations of the entity as outlined in Attachment C of the Franchise Agreement. Additionally, Crepe De Licious requires that the spouses of the franchise owners also sign this Owners Agreement.
This requirement ensures that Crepe De Licious has recourse to the personal assets of the owners and their spouses if the franchise entity fails to meet its financial or contractual obligations. This is a common practice in franchising, as it provides an additional layer of security for the franchisor.
Prospective franchisees should carefully review Attachment C of the Franchise Agreement and the Owners Agreement to fully understand the obligations being guaranteed. They should also consult with an attorney to assess the potential risks and liabilities associated with signing such an agreement. Franchisees should also consider the implications for their spouses, as their assets may also be at risk.