Does the Crisp & Green Area Development Agreement include a Personal Guaranty?
Crisp_Green Franchise · 2024 FDDAnswer from 2024 FDD Document
d and delivered this Agreement on the day and year first above written.
CRISP & GREEN FRANCHISING LLC, a Minnesota limited liability company DEVELOPER & PRINCIPAL OWNERS If an Entity: (Name of Entity) Print Name: *Effective Date: Print Name: Print Name: Individually and as a Principal Owner Print Name: Individually and as a Principal Owner Print Name: Individually and as a Principal Owner If individuals: (Signature) (Print Name) (Signature) (Print Name)
EXHIBIT A PERSONAL GUARANTY AND AGREEMENT TO BE BOUND PERSONALLY BY THE TERMS AND CONDITIONS OF THE AREA DEVELOPMENT AGREEMENT
| In consideration of the execution of the Area Development Agreement (the "Agreement") | |
|---|---|
| between CRISP & | |
| GREEN FRANCHISING LLC | |
| ("we" or "us") and (the | |
| "Developer"), dated, and for other good and valuable consideration, the | |
| undersigned, for themselves, their heirs, successors, and assigns, do jointly, individually, and | |
| severally hereby become surety and guarantor for the payment of all amounts and the performance | |
| of the covenants, terms, and conditions in the Agreement, to be paid, kept, and performed by the | |
| Developer, including without limitation the dispute resolution provisions of the Agreement. |
Further, the undersigned, individually and jointly, hereby agree to be personally bound by each and every condition and term contained in the Agreement and agree that this Personal Guaranty will be construed as though the undersigned and each of them executed an Area Development Agreement containing the identical terms and conditions of the Agreement.
The undersigned waive: (1) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (2) protest and notice of default to any party respecting the indebtedness or nonperformance of any obligations hereby guaranteed;
Source: Item 22 — CONTRACTS (FDD page 66)
What This Means (2024 FDD)
According to Crisp & Green's 2024 Franchise Disclosure Document, the Area Development Agreement does include a Personal Guaranty. Specifically, Exhibit A of the agreement is titled "PERSONAL GUARANTY AND AGREEMENT TO BE BOUND PERSONALLY BY THE TERMS AND CONDITIONS OF THE AREA DEVELOPMENT AGREEMENT." This indicates that individuals signing the Area Development Agreement may be required to provide a personal guarantee.
The personal guaranty means that the individual owners or principals are agreeing to be personally liable for the obligations of the developing entity under the Area Development Agreement. This is a common practice in franchising, especially when the franchisee is a newly formed business entity with limited assets or operating history. The franchisor, Crisp & Green in this case, seeks assurance that there are individuals with personal assets standing behind the financial and operational commitments of the franchisee.
The document further clarifies the extent of the personal guarantee, stating that the guarantors agree to be personally bound by every term and condition of the Area Development Agreement. They also waive certain rights, such as notice of demand for payment or nonperformance, and any requirement to pursue action against the developer before seeking recourse from the guarantors. The guaranty remains in effect even if the Area Development Agreement is modified or if the developer becomes insolvent.
Prospective Crisp & Green developers should carefully review Exhibit A and understand the full scope of the personal guarantee before signing the Area Development Agreement. They should seek legal counsel to fully understand the implications of providing a personal guarantee, as it could put their personal assets at risk if the developing entity fails to meet its obligations under the Area Development Agreement.