Do the owners of the proposed assignee of an Endless Summer Sweets franchise have to provide a guaranty?

Based on the 2024 Endless Summer Sweets Franchise Disclosure Document, the owners of a proposed assignee may need to provide a guaranty. While the document does not explicitly state that the owners of a proposed assignee must provide a guaranty, it does include a Guaranty and Non-Compete Agreement as Exhibit 3 to the Franchise Agreement. This agreement is executed by the undersigned person(s), each referred to as a "Guarantor," in favor of Endless Summer Sweets Franchising, Inc. This suggests that a guaranty may be required from individuals associated with the franchise.

The Franchise Agreement outlines conditions related to transfers. A "Transfer" is defined as the voluntary or involuntary transfer, sale, or disposal of substantially all business assets, the agreement itself, any direct or indirect ownership interest, or control of the business.

Given the inclusion of a Guaranty and Non-Compete Agreement and the definition of transfer, it is highly probable that Endless Summer Sweets will require a guaranty from the owners of a proposed assignee to protect its interests and ensure compliance with the franchise agreement's terms. A prospective franchisee should clarify this requirement with the franchisor.