When transferring a Monicals Pizza franchise, what agreement must the transferee and holders of legal/beneficial interest execute and deliver to the franchisor?

According to the 2025 Monicals Pizza Franchise Disclosure Document, when a franchise is transferred, all holders of a legal or beneficial interest of 5% or greater in the franchisee must execute and deliver to Monicals Pizza the Unlimited Guaranty and Assumption of Obligations. This agreement, attached as Exhibit 3 to the franchise agreement, requires these holders to assume and fulfill all of the franchisee's obligations under the franchise agreement and to be personally liable for them.

This requirement ensures that Monicals Pizza has recourse to the personal assets of those with a significant financial stake in the franchise, providing an additional layer of security for the franchisor. It is a common practice in franchising to have key stakeholders personally guarantee the obligations of the franchise entity, especially when the entity is a limited liability company or other corporate structure that shields owners from personal liability.

Prospective franchisees should carefully review Exhibit 3 and understand the full scope of the obligations they will be personally guaranteeing. They should also consider the financial implications of this guarantee and whether they are comfortable assuming this level of personal risk. It is advisable to seek legal counsel to fully understand the terms and conditions of the Unlimited Guaranty and Assumption of Obligations before signing the franchise agreement.