Is the Aerus guarantor's liability discharged if the lender fails to perfect a lien?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
tions shall affect, impair or be a defense to this Guarantee, nor shall any other circumstance which might otherwise constitute a defense available to or legal or equitable discharge of Borrower in respect of any of the Guaranteed Obligations, or Guarantor in respect of this Guarantee, affect, impair or be a defense to this Guarantee. Without limitation of the foregoing, the liability of Guarantor hereunder shall not be discharged or impaired in any respect by reason of any failure by Lender to perfect or continue perfection of any lien or security interest in any collateral or any delay by Lender in perfecting any such lien or security interest.
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the guarantor's liability is not discharged if the lender fails to perfect a lien or delays in doing so. The guarantor remains liable regardless of any failure by the lender to properly secure the collateral. This means that even if the lender does not take all the necessary steps to protect its interest in the collateral, the guarantor is still responsible for the debt.
This provision protects the lender by ensuring that the guarantor cannot escape liability based on the lender's actions or omissions regarding the collateral. It places the onus on the guarantor to understand the risks associated with the guaranteed obligations, as the guarantor's responsibility is not contingent on the lender's diligence in securing the debt. The guarantor also acknowledges that the lender has not made any representations and that the guarantor is not relying on the lender in connection with the guarantee.
For a prospective Aerus franchisee, this clause highlights the importance of carefully considering the risks before agreeing to act as a guarantor. If the primary borrower defaults, the guarantor will be held responsible for the debt, even if the lender could have taken steps to mitigate its losses by perfecting a lien on collateral. This underscores the need for the guarantor to have confidence in the borrower's ability to meet their financial obligations and to fully understand the terms of the guarantee agreement.