When does the Gold Star Personal Guaranty remain in full force and effect?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
This Personal Guaranty remains in full force and effect until all obligations arising out of and pursuant to the Franchise Agreement and any other agreement between Franchisor and Company (including, but not limited to monetary obligations), including all renewals and extensions thereof, are fully paid and satisfied, notwithstanding the termination or expiration of the relationship set forth in the Franchise Agreement or any other agreement between Franchisor and the Company.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the Personal Guaranty remains in full force and effect until all obligations arising out of the Franchise Agreement and any other agreement between Gold Star and the franchisee's company are fully paid and satisfied. This includes all monetary obligations, renewals, and extensions, regardless of the termination or expiration of the Franchise Agreement or any other agreement between Gold Star and the franchisee's company.
This means that even after the franchise term ends, a franchisee who has signed a Personal Guaranty remains liable for any outstanding debts or obligations to Gold Star. This could include unpaid royalties, advertising fees, or other financial commitments. The Personal Guaranty ensures that Gold Star can pursue the franchisee's personal assets if the franchisee's company fails to meet its financial obligations.
Prospective Gold Star franchisees should carefully consider the implications of signing a Personal Guaranty. It is essential to understand the full extent of the financial obligations under the Franchise Agreement and to assess the potential risks involved. Franchisees should also seek legal and financial advice before signing any documents, including the Personal Guaranty, to ensure they fully understand their responsibilities and liabilities.