What is the document called that Pearce Bespoke requires owners/shareholders to sign, guaranteeing the franchisee's obligations?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
ATTACHMENT B - PERSONAL GUARANTY OF OWNER/SHAREHOLDER
This Personal Guaranty and Assumption of Obligations (this "Guaranty") is given by the undersigned individuals identified as the owners of Franchisee in Attachment A.
In consideration of, and as an inducement to, the execution of that certain franchise agreement of even date herewith ("Franchise Agreement") by the parties listed as Franchisor and Franchisee in the Franchise Agreement, the undersigned hereby personally and unconditionally, jointly and severally: guaranties to Franchisor and its successors and assigns, for the Term of the Franchise Agreement and, including any renewal thereof, as provided in the Franchise Agreement, that Franchisee shall punctually pay and perform each and every undertaking, agreement and covenant stated in the Agreement and any documents, agreements, and instruments signed with or in connection with the Franchise Agreement (collectively, the "Franchise Documents"); and (2) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Franchise Documents applicable to the owners of Franchisee.
The undersigned waives:
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- acceptance and notice of acceptance by Franchisor of the foregoing undertakings.
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- notice of demand for payment of any indebtedness or non-performance of any obligations hereby guaranteed.
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- protest and notice of default to any party with respect to the indebtedness of non-performance of any obligations hereby guaranteed.
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- any right the undersigned may have to require that an action be brought against Franchisee or any other person as a condition of liability; and
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- any and all other notices and legal or equitable defenses to which the undersigned may be entitled.
The undersigned consents and agrees that:
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, owners or shareholders are required to sign a document called the "Personal Guaranty and Assumption of Obligations," also referred to as the "Guaranty." This document ensures that the owners personally guarantee the franchisee's obligations under the Franchise Agreement.
By signing this Guaranty, the owners/shareholders unconditionally guarantee that the franchisee will fulfill all undertakings, agreements, and covenants outlined in the Franchise Agreement and any related documents. This includes ensuring timely payments and performance of all obligations for the entire term of the Franchise Agreement, including any renewals. The owners also agree to be personally bound by and liable for any breaches of the Franchise Documents applicable to them.
Furthermore, the Guaranty includes a waiver of several rights, such as the right to receive acceptance and notice of acceptance from Pearce Bespoke, notice of demand for payment, protest and notice of default, and any requirement to first bring an action against the franchisee before pursuing the guarantors. The owners also waive any other legal or equitable defenses they may have. This comprehensive waiver strengthens Pearce Bespoke's position by simplifying the process of enforcing the franchisee's obligations against the owners/shareholders.
This requirement is a common practice in franchising, as it provides the franchisor with an additional layer of security. It ensures that the owners of the franchise are personally invested in the success and compliance of the business, aligning their interests with those of Pearce Bespoke. Prospective franchisees should carefully review the terms of the Personal Guaranty and Assumption of Obligations with their legal counsel to fully understand the implications of signing this document.