Does Face Foundrie require owners and their spouses to personally guarantee the obligations under the Franchise Agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
We may require each of your owners and their spouses to personally guarantee, on a joint and several basis, your obligations to us under the Franchise Agreement. The guarantees will be in the form of the Guaranty, Indemnification, and Acknowledgement attached as Exhibit C to the Franchise Agreement. Additionally, you must obtain a Confidentiality Agreement in the form included as Exhibit I to the Franchise Agreement from your Salon Manager and any other managers, assistant managers, and employees to whom you provide our confidential information and you must deliver such agreements to us within three days from the date we require them.
Franchisees must sign a personal guaranty, making you and your spouse individually liable for your financial obligations under the agreement if you are married.
The guaranty will place your and your spouse's marital and personal assets at risk, perhaps including your house, if your franchise fails.
As an inducement to Face Foundrié Franchising L.L.C. ("Franchisor") to enter into the Franchise Agreement between Franchisor and _______________________ ("Franchisee"), dated _______, 20 (the "Agreement"), the undersigned hereby unconditionally guarantees to Franchisor and Franchisor's successors and assigns that all of Franchisee's covenants and obligations, including, without limitation, monetary obligations, under the Agreement will be punctually paid and performed. This Guaranty, Indemnification, and Acknowledgment (this "Guaranty") is an unconditional, irrevocable and absolute guaranty of payment and performance and may not be cancelled, terminated, modified, or amended except by written agreement executed by both parties.
Upon demand by Franchisor, the undersigned hereby agrees to immediately make each payment required of Franchisee under the Agreement and waive any right to require Franchisor to: (a) proceed against Franchisee for any payment required under the Agreement; (b) proceed against or exhaust any security from Franchisee; (c) pursue or exhaust any remedy, including any legal or equitable relief, against Franchisee; or (d) give notice of demand for payment by Franchisee. Without affecting the obligations of the undersigned under this Guaranty, Franchisor may, without notice to the undersigned, extend, modify, or release any indebtedness or obligation of Franchisee, or settle, adjust, or compromise any claims against Franchisee, and the undersigned hereby waives notice of same and agrees to remain and be bound by any and all such amendments and changes to the Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 49–50)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, Face Foundrie may require each owner and their spouses to personally guarantee the obligations to them under the Franchise Agreement. These guarantees would be on a joint and several basis. The specific form for this guarantee is detailed in the Guaranty, Indemnification, and Acknowledgement, which is included as Exhibit C to the Franchise Agreement.
For prospective Face Foundrie franchisees, this means that if you are an owner, you and your spouse may be required to sign a personal guarantee, making you both individually liable for the financial obligations under the agreement. This guarantee places both personal and marital assets at risk, which may include your house, should the franchise fail.
This requirement is further emphasized in Exhibit C, which states that the undersigned unconditionally guarantees all of the franchisee's obligations, including monetary obligations, will be punctually paid and performed. This guaranty is unconditional, irrevocable, and absolute, and may not be cancelled, terminated, modified, or amended without a written agreement executed by both parties. The guarantor also waives any right to require Face Foundrie to proceed against the franchisee first before demanding payment from the guarantor.
It is important for potential Face Foundrie franchisees to carefully review Exhibit C and understand the full extent of the personal guarantee. Franchisees should seek legal counsel to fully understand the implications of signing such a guarantee and the potential risks to their personal assets.