factual

Where is the personal guaranty form attached in the Spray Net Franchise Disclosure Document?

Spray_Net Franchise · 2025 FDD

Answer from 2025 FDD Document

EXHIBIT B TO THE FRANCHISE AGREEMENT

PERSONAL GUARANTY

NOTE: IF FRANCHISEE IS A CORPORATION, LIMITED LIABILITY COMPANY OR OTHER BUSINESS ENTITY, THEN EACH INDIVIDUAL/ENTITY WITH AN OWNERSHIP INTEREST IN FRANCHISEE (PRINCIPALS/MEMBERS/SHAREHOLDERS/MANAGERS/ PARTNERS/ETC.) AND THEIR RESPECTIVE SPOUSES MUST EXECUTE THIS FORM OF PERSONAL GUARANTY. IF FRANCHISEE IS AN INDIVIDUAL AND FRANCHISEE'S SPOUSE HAS NOT SIGNED THE FRANCHISE AGREEMENT DIRECTLY, THEN FRANCHISEE'S SPOUSE MUST EXECUTE THIS FORM OF PERSONAL GUARANTY.

Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 55)

What This Means (2025 FDD)

According to Spray Net's 2025 Franchise Disclosure Document, the personal guaranty form is included as Exhibit B to the Franchise Agreement. Specifically, Exhibit B contains the personal guaranty that must be executed by each individual or entity with an ownership interest in the franchisee, as well as their respective spouses, if the franchisee is a corporation, limited liability company, or other business entity. If the franchisee is an individual and their spouse has not signed the Franchise Agreement directly, then the franchisee's spouse must execute the personal guaranty form.

This requirement ensures that Spray Net has recourse to the personal assets of the franchisee and their spouse in the event of a default or breach of the Franchise Agreement. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and encourages franchisees to operate their businesses responsibly. The personal guaranty essentially makes the franchisee and their spouse personally liable for the obligations of the franchised business.

Prospective Spray Net franchisees should carefully review the personal guaranty form and understand the full extent of their obligations before signing the Franchise Agreement. They should also seek legal advice to ensure that they are fully aware of the risks involved. Franchisees in community property states should be aware that their marital assets may be at risk if the franchise fails, as highlighted in the California addendum.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.