Is the spouse of a Learningrx franchisee owner required to sign a guarantee?
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).
In consideration of, and as inducement to, the execution of that certain Franchise Agreement of even date herewith (the "Agreement") by LearningRx Franchise Corporation (the "Franchisor") and the party or parties identified on the Agreement (the "Franchisee"), and acknowledging that Franchisor would not be willing to enter into the Agreement without the commitment of each spouse or domestic partner of Franchisee's owner to guarantee the performance of the Franchisee, each of the undersigned hereby personally and unconditionally (a) guarantees to Franchisor, and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that the Franchisee shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. Notwithstanding clauses (a) and (b) above, a spouse or domestic partner who is also a guarantor hereunder and who becomes widowed and who does not have (and will not obtain) an ownership interest in the Franchisee, the Agreement, or any Franchise Agreement granted thereunder as an owner, co-owner, investor, member, partner, shareholder or like capacity shall not thereafter be held responsible for any monetary obligations thereafter arising out of the terms and conditions of this Guaranty and Assumption of Obligations unless any such ownership interest is acquired in any manner by the widowed spouse or domestic partner, or the widowed spouse's children, deceased spouse's children, or domestic partner's children. Notwithstanding any change in ownership resulting from the death of a spouse or domestic partner, all monetary obligations and liabilities existing at the time of death shall continue to be an obligation of the surviving spouse or domestic partner until such obligations or liabilities shall be paid in full by the estate or by the guarantor spouse or domestic partner. Notwithstanding the limitations set forth above, any and all other non-monetary obligations of the Agreement shall remain an obligation of the surviving spouse.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 40)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the spouse or domestic partner of each owner of the franchisee will need to sign the Spousal and Domestic Partner Guarantee and Assumption of Obligations. This requirement is detailed in Item 15, which discusses the obligations of the franchisee to participate in the actual operation of the franchise business. This spousal guarantee is included as Attachment V(b) to the Franchise Agreement. Additionally, the FDD states that the franchisor would not be willing to enter into the agreement without the commitment of each spouse or domestic partner of the franchisee's owner to guarantee the performance of the franchisee.
This spousal guarantee means that the spouse is personally and unconditionally guaranteeing to Learningrx that the franchisee will punctually pay and perform each and every undertaking, agreement, and covenant set forth in the Franchise Agreement. The spouse also agrees to be personally bound by, and personally liable for the breach of, each and every provision in the agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities.
However, there is an exception: a spouse or domestic partner who is also a guarantor and who becomes widowed and does not have (and will not obtain) an ownership interest in the franchisee, the agreement, or any Franchise Agreement granted thereunder as an owner, co-owner, investor, member, partner, shareholder or like capacity shall not thereafter be held responsible for any monetary obligations thereafter arising out of the terms and conditions of this Guaranty and Assumption of Obligations unless any such ownership interest is acquired in any manner by the widowed spouse or domestic partner, or the widowed spouse's children, deceased spouse's children, or domestic partner's children. Despite any change in ownership resulting from the death of a spouse or domestic partner, all monetary obligations and liabilities existing at the time of death shall continue to be an obligation of the surviving spouse. All other non-monetary obligations of the Agreement shall remain an obligation of the surviving spouse.