Does Southern Steer require a Personal Guaranty as part of the franchise agreement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
.g., president) it must be made clear that such person holds that position with Franchisee's entity and not with Franchisor.
- (e) Management. Franchisee is prohibited from transferring, delegating, assigning or subcontracting Franchisee's obligations under this Agreement or the operation of Franchisee's Southern Steer Business to any third party or entity without Franchisor's prior approval.
- (f) Guaranty. If Franchisee is a corporation, partnership, limited liability company, or other entity, or in the future become a corporation, partnership, limited liability company, or other entity, Franchisor will require Franchisee's officers, directors, shareholders, partners, members, managers, owners, and owner's spouses or domestic partners to sign the Personal Guaranty attached hereto as Attachment C.
- (g) Sec
Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, if the franchisee is a corporation, partnership, limited liability company, or other entity, Southern Steer requires the franchisee's officers, directors, shareholders, partners, members, managers, owners, and owner's spouses or domestic partners to sign a Personal Guaranty. This guaranty is attached to the franchise agreement as Attachment C.
This requirement means that individuals associated with the franchisee entity (such as officers, directors, and owners) must personally guarantee the financial obligations of the franchise. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the franchise business fails to meet its financial obligations.
The Personal Guaranty ensures that Southern Steer can pursue the personal assets of these individuals if the franchise entity defaults on its payments or other financial responsibilities under the franchise agreement. Prospective franchisees should carefully review the terms of the Personal Guaranty and understand the extent of their personal liability before signing the franchise agreement.
Additionally, if any person or entity ceases to be one of the franchisee's owners or if any individual or entity becomes an owner of the franchisee, the franchisee must notify Southern Steer in writing within five business days. The franchisee will then be required to have the new owner execute all documents required by Southern Steer, including the Personal Guaranty.