Does the Aerus guarantor waive the right to notice of nonpayment or default related to Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
(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. 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 certain rights, including the right to notice of nonpayment or default. Specifically, the guarantor waives notice of acceptance of the guarantee, the making of loans and advances, and the providing of other financial accommodations to the borrower. They also waive presentment, demand, protest, notice of protest, notice of nonpayment or default, and all other notices to which the borrower or guarantor is entitled.
This waiver means that Aerus is not obligated to inform the guarantor if the borrower fails to make payments or defaults on their financial obligations. The guarantor is essentially agreeing to be responsible for the debt without needing to be informed of any issues with the borrower's payments. This places a significant responsibility on the guarantor, as they may be held liable for the debt without prior warning.
Additionally, the guarantor consents to amendments, modifications, supplements, extensions, renewals, or restatements of the note and any other financing agreements. This includes extensions of time for payment, increases or decreases in the amount of guaranteed obligations, interest rates, fees, other charges, or any collateral. The guarantee applies to the note and other financing agreements as amended, modified, supplemented, renewed, restated, or extended, increased, or decreased. The guarantor also waives notice of and consents to the taking, exchange, surrender, and releasing of collateral or guarantees held by the lender for the obligations of the borrower or any other party liable for the guaranteed obligations.
These waivers and consents are common in financing agreements to streamline the process and provide lenders with more flexibility in managing the debt. However, they also increase the risk for the guarantor, who should carefully consider the implications before agreeing to such terms. Prospective Aerus franchisees who are asked to act as guarantors should seek legal counsel to fully understand the extent of their obligations and the potential risks involved.