What agreement must all partners, shareholders, or members/managers of a Mr. Sandless franchisee sign?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.6.4 All shareholders of the corporation, or all members and managers of the limited liability company, must sign our Guaranty Agreement, personally agreeing to be bound by the terms of this Agreement, and guaranteeing performance of all of the franchisee's obligations under this Agreement;
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 29–30)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, if the franchisee is a corporation or limited liability company, all shareholders, members, and managers must sign a Guaranty Agreement. By signing this agreement, they personally agree to be bound by the terms of the Franchise Agreement and guarantee the franchisee's performance of all obligations under the agreement. This requirement ensures that Mr. Sandless can hold individuals accountable for the franchisee's adherence to the franchise terms.
This stipulation is common in franchising, as franchisors often seek personal guarantees from the principals of a business entity to ensure commitment and financial responsibility. The Guaranty Agreement essentially extends the obligations of the Franchise Agreement to the individual level, mitigating the risk for Mr. Sandless in case the franchisee entity fails to meet its contractual duties.
In addition to the Guaranty Agreement, other attachments are included in the Mr. Sandless Franchise Agreement, such as the Territory Addendum and Map, Confidentiality and Non-Competition Agreement, and the Internet Advertising, Social Media, Software and Telephone Listing Agreement. These agreements collectively outline the various aspects of the franchise relationship and the obligations of the franchisee and its principals.