Does the personal guaranty for Pearce Bespoke extend to any renewals of the Franchise Agreement?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the personal guaranty extends to any renewals of the Franchise Agreement. The Personal Guaranty, signed by the owners of the Franchisee, ensures that the Franchisee will fulfill all obligations under the Franchise Agreement, including any renewals. This means that the personal guarantors remain liable for the Franchisee's performance throughout the initial term and any subsequent renewal terms.
Specifically, the guaranty covers the Franchisee's punctuality in paying and performing every undertaking, agreement, and covenant stated in the Franchise Agreement and associated documents. It also binds the guarantors to be personally liable for any breaches of the Franchise Documents applicable to the owners of the Franchisee. This comprehensive coverage ensures that Pearce Bespoke has recourse to the personal assets of the guarantors if the Franchisee fails to meet its obligations.
The personal guarantors waive several rights, including the right to require that an action be brought against the Franchisee before pursuing the guarantors. They also consent to the terms of the guaranty, reinforcing their commitment to ensuring the Franchisee's compliance with the Franchise Agreement throughout its term, including any renewals. This arrangement is typical in franchising, as it provides the franchisor with an additional layer of security and encourages franchisees to uphold their contractual obligations.