What form must the agreement guaranteeing the Punch King Fitness franchisee's obligations take?
Punch_King_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
PERSONAL GUARANTY
TO THE PUNCH KING FITNESS FRANCHISE DISCLOSURE DOCUMENT
PERSONAL GUARANTY
IN CONSIDERATION for, and as an inducement for Punch King Fitness, Inc. (Franchisor) to enter into a Punch King Fitness franchise agreement and any powers of attorney and other instruments dated concurrently herewith (collectively the Franchise Documents) between Franchisor and the business entity identified below (Franchisee), the undersigned (Guarantors) hereby jointly and severally guarantee to Franchisor, and to Franchisor's successors and assigns (a) the timely payment of all Royalty Fees, late fees, interest charges, and all other fees and charges provided for under the Franchise Agreement; and (b) the timely performance of all of the provisions of the Franchise Documents for and during the term thereof (including all renewals thereof, if any). Guarantors further specifically agree to be individually bound by all covenants, obligations, and commitments of Franchisee contained in each of the Franchise Documents to the same extent as if each of the Guarantors had individually executed the same as Franchisee.
Source: Item 22 — CONTRACTS (FDD pages 56–215)
What This Means (2024 FDD)
According to the 2024 Punch King Fitness Franchise Disclosure Document, if the franchisee is a business entity, the obligations under the franchise agreement must be guaranteed via a Personal Guaranty. This guaranty is made "IN CONSIDERATION for, and as an inducement for Punch King Fitness, Inc. (Franchisor) to enter into a Punch King Fitness franchise agreement".
The Personal Guaranty stipulates that the Guarantors (those signing the guaranty) jointly and severally guarantee to Punch King Fitness the timely payment of all royalty fees, late fees, interest charges, and all other fees and charges under the Franchise Agreement. It also covers the timely performance of all provisions within the Franchise Documents for the entire term, including any renewals.
Furthermore, the Guarantors agree to be individually bound by all covenants, obligations, and commitments of the franchisee as if they had individually executed the Franchise Documents themselves. This ensures that Punch King Fitness has recourse to the personal assets of the guarantors should the franchisee entity fail to meet its obligations. This is a common practice in franchising, especially when the franchisee is a business entity rather than an individual, to provide an additional layer of security for the franchisor.