For Kitchen Solvers, if a franchisee consists of multiple individuals, what is their liability?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
- E. References. If a franchisee consists of two or more individuals, such individuals will be jointly and severally liable, and references to the franchisee in this Agreement include all such individuals. Headings and captions contained herein are for convenience of reference and must not be taken into account in construing or interpreting this Agreement.
- F. Guarantee. All principal owners of a franchisee that is a corporation, partnership or other entity must execute the form of undertaking and guarantee at the end of this Agreement. Each such person is considered a Personal Guarantor of the franchisee's obligations as noted in the undertaking and guarantee. Any person or entity that at any time after the date of this Agreement becomes a principal owner of the franchisee must, as a condition of becoming a principal owner,
execute the form of undertaking and guarantee in the form attached to this Agreement as Appendix A.
Source: Item 22 — Contracts (FDD page 49)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, if a Kitchen Solvers franchise is owned by two or more individuals, those individuals will be held jointly and severally liable for the franchise's obligations. This means that each individual is fully responsible for all debts and obligations of the franchise. Kitchen Solvers's agreements will refer to all individuals involved as 'the franchisee'.
Joint and several liability has significant implications for prospective Kitchen Solvers franchisees. If one partner is unable to meet their financial obligations, the other partner(s) will be responsible for the full amount. This applies to all aspects of the franchise agreement, including fees, royalties, and any other financial responsibilities. It also extends to any legal liabilities or damages incurred by the franchise.
Furthermore, Kitchen Solvers requires all principal owners of a franchisee entity (corporation, partnership, etc.) to execute a personal guarantee. This guarantee makes each principal owner a Personal Guarantor of the franchisee's obligations. Any person who becomes a principal owner after the agreement date must also execute this guarantee as a condition of ownership. This ensures that Kitchen Solvers has recourse to the personal assets of the owners, not just the business assets, in case of default or breach of contract.
This is a common practice in franchising, as it provides the franchisor with additional security and ensures that all owners are fully committed to the success of the franchise. Prospective Kitchen Solvers franchisees should carefully consider the implications of joint and several liability and personal guarantees before entering into a franchise agreement, and seek legal counsel to fully understand their obligations.