What is the purpose of the Kidokinetics Franchisee's Personal Guaranty?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
E AGREEMENT ATTACHMENT E
FRANCHISEE'S PERSONAL GUARANTY
| This Franchisee's Personal Guaranty and Covenant (this "Guaranty") is given by each of the |
|---|
| undersigned (each, a "Guarantor") on [], 20 to Kidokinetics Franchise LLC, a Florida |
| limited liability company ("Franchisor"), in order to induce Franchisor to enter into that certain Franchisor |
| Agreement dated of even date herewith (the "Franchise Agreement") with, |
| a("Franchisee"). |
Guarantor acknowledges that Guarantor is included in the term "Franchisee's Principal" as described in the Franchise Agreement.
Guarantor acknowledges that Guarantor has read the terms and conditions of the Franchise Agreement and acknowledges that the execution of this Guaranty and the undertakings of the Franchisee's Principal herein and in the Franchise Agreement are in partial consideration for, and a condition to the granting of, the rights granted in the Franchise Agreement, and that Franchisor would not have granted these rights without the execution of this Guaranty by Guarantor.
Guarantor hereby individually makes, agrees to be bound by, and agrees to perform, all of the covenants, representations, warranties and agreements of the Franchisee's Principal as set forth in the Franchise Agreement, including all obligations regarding non-competition and confidentiality.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the Franchisee's Personal Guaranty is a contract signed by the guarantor to induce Kidokinetics to enter into a Franchise Agreement with the franchisee. Essentially, it's a promise that the franchisee will meet their obligations under the Franchise Agreement.
Kidokinetics requires each Principal and each Principal's spouse to personally execute and bind themselves to the Guaranty. By signing this guaranty, they jointly and severally guarantee the franchisee's performance of all obligations, covenants, and agreements under the Franchise Agreement. This means that each guarantor is individually responsible for the entire debt or obligation, as well as collectively responsible.
In the event of the franchisee's death or permanent disability, the franchise is descendible to an heir or successor, provided they are capable of fulfilling the Franchise Agreement requirements and agree to sign a Personal Guaranty. If the heir or successor is unwilling or unable to comply, they may appoint a manager approved by Kidokinetics to operate the business. This ensures continuity of the business while maintaining Kidokinetics's standards and financial security.
This requirement is a common practice in franchising, as it provides the franchisor with an additional layer of security. It ensures that the franchisee and their principals are fully committed to the business and are willing to be held personally liable for its success. Prospective franchisees should carefully review the terms of the Personal Guaranty with legal counsel to fully understand their obligations and potential liabilities.