Does the Aerus guarantor consent to the settlement, compromise, or release of any of the 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 consents to the settlement, compromise, or release of any of the guaranteed obligations. Specifically, the guarantor waives notice of and consents to the settlement, compromise, or release of, or the waiver of any default with respect to, any of the Guaranteed Obligations. The guarantor also agrees that the amount of the Guaranteed Obligations will not be diminished and their liability will not be impaired or affected by any of the aforementioned actions.
This means that if Aerus decides to settle or compromise on any debt owed by the borrower (the franchisee), the guarantor's obligations remain in place. The guarantor cannot claim that their liability is reduced or eliminated because Aerus made concessions to the franchisee. This is a significant point for anyone considering acting as a guarantor, as it limits their ability to be released from the guarantee even if the original debt is altered.
This type of waiver is common in franchise agreements where a personal guarantee is required. It protects Aerus's interests by ensuring that the guarantor remains fully liable for the debt, regardless of any modifications or settlements made with the franchisee. Prospective guarantors should carefully consider this provision and understand the full extent of their potential liability before signing the guarantee agreement. It is advisable to seek legal counsel to fully understand the implications of these waivers and consents.