What exhibit contains the Unlimited Guaranty and Assumption of Obligations document that Monicals Pizza franchisees must have executed?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Simultaneously with the execution of this Agreement, all holders of a legal or beneficial interest in Franchisee of five percent (5%) or greater shall be required to execute and deliver to Franchisor the Unlimited Guaranty and Assumption of Obligations attached as Exhibit 3, through which such holders agree to assume and discharge all of Franchisee's obligations under this Agreement and to be personally liable hereunder for all of the same.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the Unlimited Guaranty and Assumption of Obligations is attached as Exhibit 3. This document is significant because it requires all individuals holding a legal or beneficial interest of 5% or greater in the franchisee to personally guarantee the franchisee's obligations under the Franchise Agreement.
This means that these individuals must agree to assume and fulfill all of the franchisee's responsibilities and liabilities outlined in the agreement. This provision ensures that Monicals Pizza has recourse to the personal assets of the guarantors if the franchisee fails to meet its obligations. The requirement for a personal guarantee is a common practice in franchising, as it provides the franchisor with an additional layer of security and commitment from the franchisee's ownership.
Prospective Monicals Pizza franchisees should carefully review Exhibit 3 and understand the full extent of the obligations they and any other holders of a legal or beneficial interest of 5% or greater will be personally guaranteeing. It is advisable to seek legal counsel to fully comprehend the implications of this guarantee before signing the Franchise Agreement.