Regarding the Mr. Sandless franchise, what obligations do partners, shareholders, members, and managers agree to when executing the Guaranty Agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| WHEREAS, a Franchise Agreement dated | ("Franchise Agreement"), has |
|---|---|
| been entered into between Mr. Sandless Franchise LLC ("Franchisor") and | |
| (referred to as "Franchisee") for the operation by Franchisee of a Mr. Sandless pursuant to such | |
| Franchise Agreement; and | |
| WHEREAS, the undersigned guarantor desires to guarantee the obligations of Franchisee to | |
| Franchisor; | |
| NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows: | |
| The undersigned, as a person with an interest in a Mr. Sandless franchise, agrees to personally and | |
| unconditionally guarantee the obligations of Franchisee to Franchisor and shall personally be subject to and | |
| bound by all terms, conditions, restrictions and prohibitions contained in the Franchise Agreement | |
| including, without limitation, the confidentiality provisions, covenants, and indemnification provisions | |
| contained in Sections 12, 18 and 19.4, respectively. Further, the undersigned agrees to personally act as | |
| surety for the full and faithful performance of all of the financial obligations, commitments and payments | |
| required of the Franchisee in such Franchise Agreement. The undersigned agrees that Franchisor does not | |
| have to pursue any remedies it may have against the Franchisee or any other individual guarantor; but, | |
| rather, it may proceed directly and primarily against the undersigned with or without joining the Franchisee | |
| or other guarantors as principals or as named parties in any such proceeding. The undersigned is jointly | |
| and severally liable for such obligations, commitments and payments required of the Franchisee. | |
| Guarantor | |
| Address: | |
Source: Item 22 — CONTRACTS (FDD page 42)
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 ensures that Mr. Sandless has recourse to the personal assets of these individuals if the franchise fails to meet its obligations.
The Guaranty Agreement makes these individuals personally subject to and bound by all terms, conditions, restrictions, and prohibitions in the Franchise Agreement. This includes, without limitation, the confidentiality provisions, covenants, and indemnification provisions outlined in Sections 12, 18, and 19.4 of the agreement. They also agree to act as surety for the full and faithful performance of all financial obligations, commitments, and payments required of the franchisee.
Mr. Sandless does not have to pursue remedies against the franchisee or any other guarantor but can proceed directly against the individual guarantor. The guarantors are jointly and severally liable for the obligations, commitments, and payments required of the franchisee. This means that each guarantor is individually responsible for the full amount of the debt, and Mr. Sandless can seek the entire amount from any one of them.