Does the personal guarantee provided to Mrcool by the Franchisee apply at all times?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
(m) Franchisee, an Owner, and/or a Spouse, as applicable and whether individually or jointly, breaches or is in default of an Ancillary Agreement, and, if the applicable agreement provides for the opportunity to cure, fails to timely cure the breach or default of the Ancillary Agreement, including, without limitation, the Franchise Owner and Spouse Agreement and Guaranty;
(4) The transferee shall be bound by all terms and conditions of this Agreement, and each owner of the transferee and their respective spouses shall personally execute the Franchise Owner and Spouse Agreement and Guaranty in the form attached to this Agreement as Exhibit 1.
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the Franchise Owner and Spouse Agreement and Guaranty is an Ancillary Agreement. If the franchisee, owner, and/or spouse breaches or defaults on any Ancillary Agreement, including the Franchise Owner and Spouse Agreement and Guaranty, and fails to cure the breach if given the opportunity, it can be grounds for Mrcool to take action.
Additionally, in the event of a transfer of the franchise, Mrcool requires that the current franchisee, each owner, and each spouse are in substantial compliance with the Franchise Agreement and all Ancillary Agreements. As a condition of approving the transfer, the new transferee, owners, and their spouses must also personally execute the Franchise Owner and Spouse Agreement and Guaranty.
These stipulations suggest that the personal guarantee is intended to be in effect throughout the term of the Franchise Agreement, and is a key component of the contractual obligations for both the initial franchisee and any subsequent transferees.