Can All County bring separate actions against the Guarantor?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.3. such liability will not be contingent or conditioned upon our pursuit of any remedies against Franchisee or any other person; and
- 3.4. such liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which we may from time to time grant to Franchisee or to any other person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the Term of the Agreement and thereafter.
- 3.5. This Guaranty shall be binding on each Guarantor and his respective successors and assigns, and shall inure to our benefit and the benefit our successors and assigns. The Guarantor may not assign his obligations hereunder without our prior written consent.
The obligations of Franchisee and Guarantor, as described herein and in the Agreement, shall not be considered fully paid, performed and discharged unless and until all payments by Franchisee to us are no longer subject to any right on the part of any person to set aside such payments or to seek to recoup the amount of such payments. The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under Title 11 of the United States Code. If any such payments by Franchisee to us are set aside in whole or in part after being made, or are settled without litigation, to the extent of such settlement, all of which is in our business judgment, the Guarantor shall be liable, jointly and severally for the full amount of our costs, interest, attorney's fees and any and all expenses which we pay or incur in connection therewith.
- WAIVERS. Each Guarantor waives all rights to payments and claims for reimbursement or subrogation which any of the Guarantor may have against Franchisee arising as a result of the Guarantor's execution of and performance under this Guaranty.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, All County can pursue action against the guarantor without first pursuing the franchisee. The guarantor's liability is not contingent on All County first attempting to collect from the franchisee or any other party. This means All County has the right to seek recourse directly from the guarantor if the franchisee defaults or fails to meet their obligations.
Furthermore, the guarantor's obligations remain in effect regardless of any leniency All County might extend to the franchisee. This includes extensions of time, credit, or acceptance of partial payments. These actions do not diminish or affect the guarantor's liability, and the guaranty remains continuing and irrevocable during the term of the agreement and thereafter. The guarantor's obligations are binding on their successors and assigns and benefit All County and its successors and assigns.
The agreement specifies that the obligations of the franchisee and guarantor are not considered fully discharged until all payments are made without any rights to be set aside or recouped. If any payments made by the franchisee are later set aside, the guarantor remains liable for All County's costs, interest, attorney's fees, and any expenses incurred in connection with recovering those payments. The guarantor also waives any rights to payments or claims against the franchisee arising from their obligations under the guaranty.
In practical terms, this clause protects All County by ensuring they have multiple avenues for recovering owed funds. It places a significant responsibility on the guarantor, who cannot rely on All County pursuing the franchisee first or on any leniency extended to the franchisee. Prospective franchisees should carefully consider the implications of this clause and ensure that any potential guarantors fully understand their obligations and potential liabilities.