In the Monicals Pizza Unlimited Guaranty, what is the significance of the Guaranty being 'absolute'?

According to the 2025 Monicals Pizza Franchise Disclosure Document, the Unlimited Guaranty and Assumption of Obligations, attached as Exhibit 3, requires all holders of a legal or beneficial interest of five percent (5%) or greater in the franchisee to execute and deliver this guaranty to Monicals Pizza. By signing this guaranty, these holders agree to assume and discharge all of the franchisee's obligations under the Franchise Agreement and become personally liable for them.

Monicals Pizza requires this guaranty to ensure that there is a direct line of responsibility and accountability for the franchisee's obligations. This means that Monicals Pizza can pursue the personal assets of the guarantors to satisfy the franchisee's debts or obligations under the agreement. This is a significant commitment and potential risk for anyone holding a substantial interest in the franchise.

The guarantor unconditionally guarantees to Monicals Pizza and its Affiliates: (a) the full and timely performance by Developer of the Development Agreement and each related Agreement and all terms, conditions and covenants thereof, and (b) the payment by Developer of royalties and all other sums payable by Developer under the Development Agreement and each Related Agreement. The guarantor will also pay Monicals Pizza all attorney's fees and disbursements incurred by Monicals Pizza in connection with any breach or default by Franchisee under the Franchise Agreement or any Related Agreement and/or the enforcement of this Guaranty Agreement, in each instance whether or not suit is brought (and if suit is brought, through appeals and collection efforts). Any sums not paid to Franchisor or any Affiliate when due hereunder will bear interest at the rate of 18% per annum, from the due date until full payment is received by Franchisor or such Affiliate.

Prospective franchisees should carefully consider the implications of the Unlimited Guaranty, particularly if they have partners or investors with significant ownership stakes. It is advisable to seek legal counsel to fully understand the extent of personal liability being assumed and to assess the potential risks involved before signing the Franchise Agreement and the Unlimited Guaranty.