What is the name of the document that outlines the personal guarantee obligations for a Remax franchisee?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
You, or if you are a corporation, partnership, limited liability company or other business entity, each of your owners, will not only be required to personally guarantee your obligations under the Franchise Agreement but must also agree to be personally bound by, and personally liable for the breach of, every provision of the Franchise Agreement, including monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. If you are a corporation, partnership, limited liability company or other business entity, and you, in turn, are owned by another business entity or entities, each owner of that business entity or those business entities must also agree to be personally bound by, and personally liable for the breach of, every provision of the Franchise Agreement, including monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. This "Guaranty and Assumption of Obligations" is attached to the Franchise Agreement, which is Exhibit A to this disclosure document.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 80–81)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the document outlining the personal guarantee obligations for a franchisee is called the "Guaranty and Assumption of Obligations." This document is attached to the Franchise Agreement as Exhibit A.
This means that if you are a Remax franchisee, especially if you operate under a business entity like a corporation or LLC, you and potentially all owners of your business entity (and their owners, if applicable) must personally guarantee the obligations under the Franchise Agreement. This personal guarantee extends to every provision of the agreement, including monetary obligations and requirements to take or avoid specific actions.
For a prospective Remax franchisee, this implies a significant personal financial risk. Even if the franchise is operated through a separate legal entity, the franchisee's personal assets are at stake if the business fails to meet its financial or operational obligations under the Franchise Agreement. It is crucial to carefully review Exhibit A and understand the full extent of the personal guarantee before signing the Franchise Agreement.