What is the purpose of the guarantor affirmatively agreeing to the covenants in the Face Foundrie Franchise Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned hereby acknowledges and expressly agrees to be personally bound by all of the covenants contained in the Agreement, including, without limitation, those covenants contained in Sections 7, 11, 13, 14, 18, and 19. Signature by the undersigned on this Guaranty constitutes the undersigned's signature on the Agreement related to all covenants. The undersigned asserts that he or she has read such covenants, been advised by counsel regarding their effect, and hereby affirmatively agree to them in order to secure the rights granted to Franchisee by Franchisor under the Agreement.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the guarantor's agreement to the covenants within the Franchise Agreement is to secure the rights granted to the franchisee by Face Foundrie. By signing the guaranty, the guarantor acknowledges and agrees to be personally bound by all the covenants in the agreement, including those in specific sections such as 7, 11, 13, 14, 18, and 19. The guarantor also confirms they have read these covenants and have been advised by counsel regarding their implications.
This arrangement ensures that Face Foundrie has recourse beyond the franchisee entity itself, especially in cases where the franchisee is a limited liability company or another form of business that shields personal assets. The guarantor's agreement provides an additional layer of security for Face Foundrie, ensuring that the obligations outlined in the Franchise Agreement are met. This is a common practice in franchising, particularly when the franchisee is a newly formed entity or has limited operating history.
The guaranty remains in effect even if the Franchise Agreement terminates or expires, with the guarantor's obligations and liabilities continuing for events that occurred before the termination date. The guaranty also addresses the scenario of the guarantor's death, specifying that the guarantor's estate will be bound by the guaranty for defaults and obligations existing at the time of death. This comprehensive approach ensures that Face Foundrie's interests are protected throughout the term of the agreement and beyond.