Does the Dq Treat Operating Agreement include an Undertaking and Guarantee?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
UNDERTAKING AND GUARANTEE
NOTE: If Licensee is a corporation or other business entity, each of the Owners must sign this undertaking and guarantee as an individual and not as an Owner or officer of the entity.
In consideration of the execution of the operating agreement by Company, and for other good and valuable consideration, each of the signatories below, for themselves, their heirs, legal representatives, successors and assigns (collectively the "Guarantors") jointly, individually and severally guarantee the full and timely performance by Licensee of each and every obligation of Licensee arising under the operating agreement, and agrees to be personally bound by, and personally liable for the breach of each and every provision in the operating agreement, including the payment of all amounts and the performance of all covenants, terms and conditions required under the operating agreement.
The Guarantors, individually, jointly and severally, agree to be personally bound by each and every condition and term in the operating agreement as though each of the Guarantors had executed an operating agreement with the identical terms and conditions of the operating agreement, including the dispute resolution and jury trial waiver provisions, and any amendments, extensions, or other modifications to the operating agreement.
Source: Item 22 — UItem 22U***:** U**Contracts (FDD page 67)
What This Means (2025 FDD)
Yes, according to the 2025 Dq Treat Franchise Disclosure Document, the Operating Agreement includes an Undertaking and Guarantee. If the franchisee is a corporation or other business entity, each of the owners must sign this undertaking and guarantee as an individual, not as an owner or officer of the entity. This means that the franchisor, American Dairy Queen Corporation (ADQ), requires a personal guarantee from the owners of a business entity that is a franchisee.
The Undertaking and Guarantee ensures that the owners are personally liable for the franchisee's obligations under the Operating Agreement. The guarantors guarantee the full and timely performance by the licensee of every obligation of the licensee arising under the operating agreement. They also agree to be personally bound by, and personally liable for the breach of each and every provision in the operating agreement, including the payment of all amounts and the performance of all covenants, terms, and conditions required under the operating agreement.
This is a common practice in franchising, as it provides the franchisor with additional security that the franchisee will meet its obligations. The guarantors agree to be personally bound by each and every condition and term in the operating agreement as though each of the guarantors had executed an operating agreement with the identical terms and conditions of the operating agreement, including the dispute resolution and jury trial waiver provisions, and any amendments, extensions, or other modifications to the operating agreement. This means that the owners are subject to the same terms and conditions as the franchisee itself.