If the Learningrx franchisee is a business entity, who must sign the Guaranty and Assumption of Franchisee's Obligations?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are a business entity, each of your officers, directors, shareholders, partners, and members, plus any individual who owns, directly or indirectly, a 5% or greater interest in you must also sign the Guaranty and Assumption of Franchisee's Obligations assuming and agreeing to discharge all of your obligations and comply with all restrictions under the Franchise Agreement. (See Attachment V(a) to the Franchise Agreement). In addition, the spouse or domestic partner of each owner of the franchisee will also need to sign the Spousal and Domestic Partner Guarantee and Assumption of Obligations (See Attachment V(b) to the Franchise Agreement).
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2025 FDD)
According to the 2025 Learningrx Franchise Disclosure Document, if the franchisee is a business entity, certain individuals associated with the entity must sign the Guaranty and Assumption of Franchisee's Obligations. This includes each of the entity's officers, directors, shareholders, partners, and members. Additionally, any individual who directly or indirectly owns 5% or greater interest in the franchisee entity must also sign the Guaranty. This ensures that individuals with significant control or ownership in the franchisee business are personally responsible for upholding the obligations outlined in the Franchise Agreement. Attachment V(a) to the Franchise Agreement contains the standard Guaranty and Assumption of Obligations form.
Furthermore, the spouse or domestic partner of each owner of the Learningrx franchise will also need to sign the Spousal and Domestic Partner Guarantee and Assumption of Obligations, as detailed in Attachment V(b) to the Franchise Agreement. This requirement extends the personal guarantee to the spouses or domestic partners of the owners, making them also responsible for the franchisee's obligations.
These stipulations are designed to protect Learningrx by ensuring that multiple parties are committed to the franchisee's performance and compliance with the Franchise Agreement. By requiring signatures from key individuals and their spouses or domestic partners, Learningrx aims to mitigate the risk of non-compliance or default by the franchisee. Prospective franchisees should carefully review these requirements and understand the implications of signing the Guaranty and Assumption of Obligations.