Daytona Beach, FL asked in Business Law for Florida

Q: Business Law, Franchise question. Most FDD has a personal guaranty clause. What can I do about it? Can it be limited?

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2 Lawyer Answers
Linda Liang
Linda Liang
PREMIUM
Answered
  • Boca Raton, FL
  • Licensed in Florida

A: Not much. It is an offer. You can accept or provide counter offer. You should be represented by an attorney to know what you actually sign into.

Keith Kanouse
Keith Kanouse
Answered
  • Boca Raton, FL
  • Licensed in Florida

A: This is a good question as an unlimited personal guarantee puts your assets at risk. In my opinion, the Franchise Business should stand alone and generate enough income from which to pay the monetary obligations to the Franchisor. I have no problem with you signing a separate confidentiality and noncompetition agreement consistent with the terms of the Franchise Agreement that other employees have to sign. The same thing goes when you sign a lease. You will want to limit your exposure under the lease guaranty.

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