What happens to the Gokhale Method Guarantee if the Franchise Agreement is transferred by the Franchisee?

According to the 2024 Gokhale Method Franchise Disclosure Document, the Personal Guarantee terminates upon the transfer or assignment of the Franchise Agreement by the franchisee. However, this termination does not release the guarantors from obligations and liabilities that arose before the transfer or assignment's effective date. These obligations remain in full effect until they are satisfied or discharged. Additionally, any covenants that are meant to continue after the termination, expiration, transfer, or assignment of the agreement will remain in force according to their specific terms.

In practical terms, if a Gokhale Method franchisee sells or transfers their franchise to a new owner, the original guarantor is no longer responsible for the new franchisee's future obligations. However, the guarantor remains liable for any debts, breaches, or other liabilities that the original franchisee incurred before the transfer took place. This ensures that Gokhale Method is protected from any losses resulting from the original franchisee's actions during their tenure.

This provision protects Gokhale Method by ensuring that financial responsibilities are met for the period the original franchisee operated the business. Prospective franchisees should understand that transferring the agreement does not automatically absolve the guarantor of past liabilities. It is important for both the franchisee and the guarantor to ensure all obligations are current and settled before any transfer or assignment is finalized to avoid future disputes.