Does Eos Worldwide guarantee a franchisee's obligation?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
Your spouse will be liable for all financial obligations under the Franchise Agreement even though your spouse has no ownership interest in the franchise.
This guarantee will place both your and your spouse's marital and personal assets, perhaps including your house, at risk if your franchise fails.
Source: Item 10 — FINANCING (FDD page 32)
What This Means (2025 FDD)
Based on the 2025 FDD, Eos Worldwide does not guarantee a franchisee's obligations; however, in certain circumstances, a franchisee's spouse will be liable for all financial obligations under the Franchise Agreement, even if the spouse has no ownership interest in the franchise. This spousal guarantee puts both the franchisee's and their spouse's marital and personal assets at risk if the franchise fails. This may include their house.
This type of spousal guarantee is not uncommon in franchising. Franchisors often require it to ensure that all assets are available to cover the franchisee's financial obligations. This is because, in community property states, assets acquired during the marriage are jointly owned. Even in non-community property states, a spouse may have an indirect interest in the business's assets.
Prospective franchisees should carefully consider the implications of a spousal guarantee and discuss it with their spouse and legal counsel before signing the Franchise Agreement. They should also assess their financial situation and risk tolerance to determine if they are comfortable with the potential financial exposure.