Does the Aerus guarantor consent to increases or decreases in the amount of any guaranteed obligations?
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 guarantor waives notice of and consents to any changes to the guaranteed obligations. This includes any amendment, modification, supplement, extension, renewal, or restatement of the Note and any of the other Financing Agreements. The guarantor specifically consents to extensions of time of payment or increases or decreases in the amount of any of the Guaranteed Obligations, interest rate, fees, other charges, or any collateral. The guarantee applies to the Note and the other Financing Agreements and the Guaranteed Obligations as so amended, modified, supplemented, renewed, restated or extended, increased or decreased.
This means that if you act as a guarantor for an Aerus franchisee's financial obligations, you are agreeing in advance to any changes the franchisee and Aerus might make to the loan terms. This could include changes to the loan amount, interest rate, payment schedule, or collateral requirements. As a guarantor, you will not receive separate notice or have the opportunity to object to these changes, and your guarantee will automatically extend to cover the modified obligations.
This is a significant risk for the guarantor, as the potential liability could increase without their explicit consent at the time of the change. It is crucial for any potential guarantor to fully understand the terms of the guarantee and the underlying financing agreements, and to consider obtaining independent legal and financial advice before signing any guarantee agreement related to an Aerus franchise.