Does the Fat Shack Franchise Agreement require a Guaranty and Assumption of Franchisee's Obligations as an exhibit?

According to Fat Shack's 2025 Franchise Disclosure Document, the Franchise Agreement includes a Guaranty and Assumption of Franchisee's Obligations as Exhibit V. This requirement extends not only to individual franchisees but also to business entities. If the franchisee is a corporation, partnership, limited liability company, or other business entity, the shareholders, members, partners, other owners, directors, officers, managers, and any other individuals designated by Fat Shack must execute this guaranty.

This guaranty ensures that these individuals personally guarantee the full payment and performance of the franchisee's obligations to Fat Shack. They also individually undertake to be bound, jointly and severally, by all the terms of the Franchise Agreement. This means that Fat Shack can seek recourse directly from these individuals if the franchisee fails to meet its obligations.

The inclusion of this exhibit and the requirements for entity franchisees are fairly standard in franchising. Franchisors often seek personal guarantees to ensure that there is a responsible party who is fully committed to the success of the franchise and can be held accountable for its performance. Prospective franchisees should carefully review the terms of the Guaranty and Assumption of Franchisee's Obligations to understand the full extent of their personal liability.