Are the spouses of Deck Medic Owners required to personally guarantee the franchisee's obligations under the Franchise Agreement?
Deck_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
You, and if you are a partnership or Corporate Entity, each of your members, shareholders and/or partners (collectively, "Owners"), must personally guarantee all of your obligations to us under the Franchise Agreement. Each Owner and Owner's spouse must personally guarantee your obligations to us under the Franchise Agreement. You must also promise in writing that, among other things, during the term of the Franchise Agreement you will not participate in any business that in any way competes with a Deck Medic Business, and that for 24 months after the expiration of termination of the Franchise Agreement (with said period being tolled during any periods of noncompliance), you will not participate in any competitive business located within and/or servicing customers located within your Operating Territory and a 25 mile radius surrounding your Operating Territory. Further you will not participate in any competitive business located within and/or servicing customers located within the operating territory of any other Deck Medic Business. Your managers will be required by us to sign a confidentiality agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 33–34)
What This Means (2024 FDD)
According to Deck Medic's 2024 Franchise Disclosure Document, each Owner and Owner's spouse must personally guarantee all of the franchisee's obligations to Deck Medic under the Franchise Agreement. This means that spouses are required to sign a Franchise Owner and Spouse Agreement and Guaranty, which is attached to the Franchise Agreement as Exhibit 1. This agreement ensures that Deck Medic has recourse to the personal assets of both the owner and their spouse if the franchise fails to meet its financial or contractual obligations.
This requirement is further emphasized in several sections of the FDD, highlighting the importance Deck Medic places on securing these guarantees. For instance, the FDD states that all proceedings related to the franchise agreement involving the franchisee, franchisee's owners, spouses, and/or guarantors will be conducted on an individual basis. This underscores the personal liability assumed by both the owner and their spouse.
The Franchise Owner and Spouse Agreement and Guaranty also includes obligations related to brand protection, confidentiality, and non-competition restrictions. This means that the spouse is not only financially responsible but also legally bound to protect Deck Medic's interests, even after the termination or expiration of the franchise agreement. Deck Medic emphasizes that it relies on this agreement and would not enter into a Franchise Agreement without it.