When must the guarantor make payments to the lender for Aerus guaranteed obligations?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
or any other Obligor (as hereinafter defined) and Lender, whether such expenses are incurred before, during or after the initial or any renewal term of the Note and the other Financing Agreements or after the commencement of any case with respect to Borrower or Guarantor under the United States Bankruptcy Code or any similar statute.
- (b) This Guarantee is a guaranty of payment and not of collection. Guarantor agrees that Lender need not attempt to collect any Guaranteed Obligations from Borrower, Guarantor or any other Obligor or to realize upon any collateral, but may require Guarantor to make immediate payment of all of the Guaranteed Obligations to Lender when due, whether by maturity, acceleration or otherwise, or at any time thereafter. Lender may apply any amounts received in respect of the Guaranteed Obligations to any of the Guaranteed Obligations, in whole or in part (including attorneys' fees and legal expenses incurred by Lender with respect thereto or otherwise chargeable to Borrower or Guarantor) and in such order as Lender may elect.
- (c) Payment by Guarantor shall be made to Lender at the office of Lender from time to time on demand as Guaranteed Obligations become due. Guarantor shall make all payments to Lender on the Guaranteed Obligations free and clear of, and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restrictions or conditions of any kind. One or more successive or concurrent actions may be brought hereon against Guarantor either in the same action in which Borrower or any other Obligor is sued or in separate actions. In the event any claim or action, or action on any judgment, based on this Guarantee is brought against Guarantor, Guarantor agrees not to deduct, set-off, or seek any counterclaim for or recoup any amounts which are or may be owed by Lender to Guarantor.
- (d) It is acknowledged that this Guaranty, the Note and the other Financing Agreements are being executed in connection with the execution of a certain Franchise Agreement (the "Franchise Agreement") by and between Borrower and Lender or an affiliate of Lender. Notwithstanding the generality of the foregoing provisions or any other contrary provision hereof, the guaranty obligation contemplated hereunder shall be non-recourse and shall not apply except in the following cases: (i) fraud or misrepresentation in connection with the execution or performance of the Franchise Agreement, the Note or any other Financing Agreements; (ii) theft or conversion of the assets of Lender or any of Lender's affiliates (including Aerus LLC) including any consigned goods or proceeds from the sale of any consigned good (which may include selling such consigned goods at prices below the required prices); (iii) misuse or infringement of any trademark or other item of intellectual property or right owned or licensed by Lender or any of Lender's affiliates (including Aerus LLC); or (iv) breach or violation of any license granted under the Franchise Agreement concerning such trademarks and intellectual property.
2. Waivers and Consents.
(a) Notice of acceptance of this Guarantee, the making of loans and advances and providing other financial accommodations to Borrower and presentment, demand, protest, notice
of protest, notice of nonpayment or default and all other notices to which Borrower or Guarantor is entitled are hereby waived by Guarantor.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the guarantor is obligated to make immediate payments to the lender for all guaranteed obligations when they become due. This includes instances of maturity, acceleration, or any other circumstance that triggers the due date. The lender is not required to attempt to collect from the borrower, guarantor, or any other obligor, nor do they need to realize upon any collateral before demanding payment from the guarantor. Payments must be made at the lender's designated office upon demand as the guaranteed obligations become due. These payments must be made without any deductions or withholdings for setoff, counterclaim, taxes, or other restrictions.
Furthermore, the liability of the guarantor for the entire guaranteed obligations can mature and become immediately payable if an event of default occurs as defined in the Note, even if the borrower's liability has not yet matured. This acceleration clause underscores the guarantor's significant responsibility to the lender. The guarantee is continuing, unlimited, absolute, and unconditional, meaning the guarantor remains liable until the lender receives a written termination notice sent by certified mail, return receipt requested.
This arrangement carries substantial implications for potential Aerus franchisees who require a guarantor for their financing. The guarantor's commitment is not merely a formality but a binding agreement to cover the franchisee's obligations under various circumstances. The guarantor waives rights to subrogation, reimbursement, or recourse against the borrower, collateral, or other obligors. This means the guarantor cannot seek compensation from the franchisee or their assets for payments made to the lender.
Prospective franchisees should carefully consider the financial capacity and willingness of their guarantor, as the guarantor's obligations are broad and can be triggered by various events, including default by the franchisee. It is also important to note that the guarantor's liability extends to all obligations, including principal, interest, fees, and expenses, incurred by the borrower. The guarantor should fully understand the terms of the guarantee and the potential financial risks involved before signing the agreement.