What obligations does the guaranty agreement for Floyds 99 cover?

According to the 2025 Floyds 99 Franchise Disclosure Document, each officer, director, shareholder, partner, member, or owner of an entity may be required to sign an agreement personally guaranteeing and agreeing to perform all obligations of the franchisee under the Franchise Agreement. Additionally, if an owner's spouse is also an owner of the franchisee, they must also sign the guaranty attached as Exhibit II to the Franchise Agreement.

This means that individuals with significant ownership or management roles in a Floyds 99 franchise, especially if the franchisee is a business entity, may have to personally guarantee the franchise's obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the franchise fails to meet its financial or contractual obligations.

For a prospective Floyds 99 franchisee, this requirement has significant implications. It means that your personal assets could be at risk if the franchise does not perform well or if the business violates the franchise agreement. Before signing a franchise agreement, it is crucial to carefully review the guaranty agreement (Exhibit II) with a legal advisor to fully understand the scope of the obligations and potential liabilities. Franchisees should also consider the financial stability of the business and the potential risks involved before committing to the franchise.