What is the liability of each individual if more than one person executes the Gold Star Personal Guaranty?

According to Gold Star's 2025 Franchise Disclosure Document, if more than one person signs the Personal Guaranty, each person is jointly and severally liable for the obligations. This means that Gold Star can pursue any one of the guarantors for the full amount of the debt or obligation, regardless of the contributions or agreements between the guarantors themselves.

This type of liability is significant for potential Gold Star franchisees because it creates a situation where each guarantor is responsible for the entire debt. If one guarantor is unable to pay, the others must cover the shortfall. This is a common practice in franchising, as it provides the franchisor with greater security.

For example, if two partners jointly guarantee a $100,000 loan for their Gold Star franchise and one partner declares bankruptcy, the other partner is fully responsible for the entire $100,000, even if they had an agreement to split the debt 50/50. Prospective franchisees should carefully consider the implications of joint and several liability and ensure they have a clear understanding with their co-guarantors regarding financial responsibilities and risk tolerance.