Does the revocation or termination by the Guarantor affect amendments, extensions, renewals and modifications of Guaranteed Obligations for Aerus?
Aerus Franchise · 2025 FDDAnswer from 2025 FDD Document
Revocation or termination hereof by Guarantor shall not affect, in any manner, the rights of Lender or any obligations or duties of Guarantor under this Guarantee with respect to (i) Guaranteed Obligations which have been created, contracted, assumed or incurred prior to the receipt by Lender of such written notice of revocation or termination as provided herein, including, without limitation, (ii) all amendments, extensions, renewals and modifications of such Guaranteed Obligations (whether or not evidenced by new or additional agreements, documents or instruments executed on or after such notice of revocation or termination), (iii) all interest, fees and similar charges accruing or due on and after revocation or termination, and (iv) all attorneys' fees and legal expenses, costs and other expenses paid or incurred on or after such notice of revocation or termination in attempting to collect or enforce any of the Guaranteed Obligations against Borrower, Guarantor or any other Obligor (whether or not suit be brought), or (v) Guaranteed Obligations which have been created, contracted, assumed or incurred after the receipt by Lender of such written notice of revocation or termination as provided herein pursuant to any contract entered into by Lender prior to receipt of such notice.
The sole effect of such revocation or termination by Guarantor shall be to exclude from this Guarantee the liability of Guarantor for those Guaranteed Obligations arising after the date of receipt by Lender of such written notice which are unrelated to Guaranteed Obligations arising or transactions entered into prior to such date.
Without limiting the foregoing, this Guarantee may not be terminated and shall continue so long as the Note shall be in effect (whether during its original term or any renewal, substitution or extension thereof).
Source: Item 23 — Receipts (FDD pages 74–305)
What This Means (2025 FDD)
According to Aerus's 2025 Franchise Disclosure Document, the revocation or termination by the Guarantor does not affect amendments, extensions, renewals, and modifications of Guaranteed Obligations under certain conditions. Specifically, the Guarantor remains responsible for obligations created, contracted, assumed, or incurred before the Lender receives written notice of termination. This includes any amendments, extensions, renewals, and modifications to those obligations, regardless of whether new agreements are executed after the termination notice.
Furthermore, the Guarantor is liable for all interest, fees, and similar charges accruing after the revocation or termination notice, as well as any legal expenses incurred to enforce the Guaranteed Obligations against the Borrower, Guarantor, or any other Obligor. The Guarantor is also responsible for Guaranteed Obligations created after the termination notice if they arise from contracts entered into before the notice was received.
The only effect of the revocation or termination is to exclude the Guarantor's liability for Guaranteed Obligations arising after the Lender receives the written notice, provided these obligations are unrelated to prior transactions. The guarantee remains in effect as long as the Note is active, including any renewals, substitutions, or extensions. This ensures that Aerus's financial interests are protected even if a guarantor attempts to withdraw their guarantee, as long as the obligations stem from prior agreements or the note remains in effect.
This clause protects Aerus by ensuring that guarantees remain effective for existing financial arrangements, even if a guarantor tries to terminate their obligation. However, it is crucial for potential franchisees to understand the conditions under which a guarantee can be terminated and the extent to which they remain liable for ongoing obligations. Franchisees should seek legal counsel to fully understand the implications of these guarantee terms.