Does the guarantor of a Golden Krust Caribbean Restaurant franchise have direct and immediate liability?

According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, if the franchisee is a corporation, limited liability company, or partnership, each owner must execute an agreement to be bound jointly and severally by all provisions of the Franchise Agreement and any ancillary agreements. This means that each owner is individually responsible for all obligations of the franchisee.

Furthermore, the owners and their spouses, if applicable, must personally guarantee the franchisee's payment and performance under the Franchise Agreement. This guarantee is formalized through the Guaranty and Assumption of Obligations, which is Exhibit C to the Franchise Agreement. By signing this guarantee, the owners and their spouses agree to be personally liable for the franchisee's debts and obligations to Golden Krust Caribbean Restaurant.

In practical terms, this requirement means that the personal assets of the owners and their spouses are at risk if the Golden Krust Caribbean Restaurant franchise fails to meet its financial or operational obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of default by the franchisee. Prospective franchisees should carefully consider the implications of this personal guarantee and seek legal and financial advice before signing the Franchise Agreement.