What obligations under the Franchise Agreement must the Remax franchisee and their owners personally guarantee?
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, franchisees and their owners must personally guarantee all obligations under the Franchise Agreement. This requirement extends to monetary obligations, obligations to take or refrain from specific actions, and obligations to engage or refrain from engaging in specific activities.
For a prospective Remax franchisee, this means that if the franchisee is a business entity (corporation, partnership, LLC, etc.), the owners of that entity must also agree to be personally bound by and liable for any breach of the Franchise Agreement. This personal guarantee extends to every provision of the agreement. If the business entity is owned by another business entity, the owners of that entity must also provide the same guarantee.
This "Guaranty and Assumption of Obligations" is included as part of the Franchise Agreement, which is an exhibit to the FDD. This is a standard practice in franchising, as it ensures that the franchisor has recourse to the personal assets of the franchisee and their owners in the event of a default or breach of contract. Franchisees should carefully review the Franchise Agreement and understand the full extent of their personal obligations before signing.