For a Remax franchise owned by a business entity, who is required to sign the Guaranty and Assumption of Obligations?

According to Remax's 2025 Franchise Disclosure Document, if the franchisee is a business entity, each of the business entity's owners must sign the Guaranty and Assumption of Obligations attached to the Franchise Agreement. The FDD defines 'Owners' as the individual shareholders, partners, members, or other individuals who have a legal or equitable ownership interest in, or who otherwise have the right to control, the Business Entity. If the Business Entity is owned in whole or in part by one or more other Business Entities (each a 'Parent Entity'), reference to Owners in this Agreement also means the individual or individuals who own or who otherwise have a legal right to control any Parent Entity.

This requirement ensures that Remax has recourse to the personal assets of the individuals controlling the business entity, providing an additional layer of security for the franchisor. This is a common practice in franchising, as it mitigates the risk associated with franchisees shielding themselves from liability through a corporate structure. The guaranty makes the owners personally liable for the business entity's obligations under the Franchise Agreement.

Prospective Remax franchisees operating through a business entity should carefully review the Guaranty and Assumption of Obligations to understand the full extent of their personal liability. They should also be aware that this obligation extends to any successor agreements during any post-expiration holdover period. Franchisees should consult with legal and financial advisors to fully understand the implications of signing such a guaranty.