Can an extension of time granted to the 7 Brew franchisee affect the guarantor's liability?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (1) his or her direct and immediate liability under this Guaranty will be joint and several, both with Franchisee and among other guarantors; (2) he or she will render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon Franchisor's pursuit of any remedies against Franchisee or another person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence Franchisor may from time to time grant to Franchisee or to another person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims (including, without limitation, any release of other guarantors), none of which will in any way modify or amend this Guaranty, which will continue and be irrevocable during the term of the Agreement (including, without limitation, any extensions of its term) and afterward for so long as any performance is or might be owed under the Agreement by Franchisee or any of its owners and for so long as Franchisor has any cause of action against Franchisee or any of its owners; (5) this Guaranty will continue in full force and effect for (and as to) any extension or modification of the Agreement and despite the transfer of any interest in the Agreement or Franchisee, and each of the undersigned waives notice of any and all renewals, extensions, modifications, amendments, or transfers; and (6) any Franchisee indebtedness to the undersigned, for whatever reason, whether currently existing or hereafter
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, a guarantor's liability is not affected by any extension of time granted to the franchisee. The Guaranty and Assumption of Obligations agreement specifies that the guarantor's liability will not be diminished, relieved, or otherwise affected by any extension of time that 7 Brew may grant to the franchisee. This includes accepting partial payments or compromising claims.
This provision ensures that the guarantor remains fully liable for the franchisee's obligations, even if 7 Brew provides the franchisee with more time or flexibility to meet those obligations. The guaranty remains irrevocable during the term of the Franchise Agreement, including any extensions, and afterward, as long as any performance is or might be owed under the Agreement by Franchisee or any of its owners and for so long as 7 Brew has any cause of action against Franchisee or any of its owners.
Furthermore, the Guaranty remains in effect for any extension or modification of the Franchise Agreement, even if there is a transfer of interest in the Agreement or the franchisee. The guarantor waives notice of any renewals, extensions, modifications, amendments, or transfers. This means that the guarantor's obligations continue unchanged regardless of any changes to the agreement or the franchisee's ownership.
This clause is designed to protect 7 Brew by ensuring that the guarantor's commitment remains firm throughout the relationship with the franchisee, regardless of any accommodations 7 Brew might make to the franchisee. Prospective franchisees should ensure their guarantors fully understand these terms, as they create a robust and continuing obligation on the part of the guarantor.