Does the Aerus guarantee apply to the note and financing agreements as amended?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor also waives notice of and hereby consents to, (iii) any amendment, modification, supplement, extension, renewal, or restatement of the Note and any of the other Financing Agreements, including, without limitation, extensions of time of payment of or increase or decrease in the amount of any of the Guaranteed Obligations, interest rate, fees, other charges, or any collateral, and the guarantee made herein shall apply to the Note and the other Financing Agreements and the Guaranteed Obligations as so amended, modified, supplemented, renewed, restated or extended, increased or decreased, (iv) the taking, exchange, surrender and releasing of collateral or guarantees now or at any time held by or available to Lender for the obligations of Borrower or any other party at any time liable on or in respect of the Guaranteed Obligations or who is the owner of any property which is security for the Guaranteed Obligations (individually, an "Obligor" and collectively, the "Obligors"), (v) the exercise of, or refraining from the exercise of any rights against Borrower or any other Obligor or any collateral and (vi) the settlement, compromise or release of, or the waiver of any default with respect to, any of the Guaranteed Obligations. Guarantor agrees that the amount of the Guaranteed Obligations shall not be diminished and the liability of Guarantor hereunder shall not be otherwise impaired or affected by any of the foregoing.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the guarantee provided by the guarantor applies to the Secured Promissory Note and other Financing Agreements, including any amendments, modifications, supplements, extensions, renewals, or restatements. The guarantor also waives any notice of these changes. This means that the guarantor's obligation remains in effect even if the terms of the Note or other Financing Agreements are altered.
This waiver includes extensions of time for payment, changes in interest rates, fees, other charges, or any collateral related to the Guaranteed Obligations. The guarantor's liability will not be diminished or affected by these changes. This ensures that Aerus, as the lender, has a continuous and reliable guarantee regardless of any modifications made to the financing arrangements.
However, the guaranty obligation is non-recourse except in specific cases such as fraud, misrepresentation, theft, misuse of intellectual property, or breach of the Franchise Agreement. This means that the guarantor is generally not personally liable unless one of these exceptions occurs. Prospective franchisees should carefully consider the implications of providing a guarantee and understand the specific circumstances under which they could be held liable.