Can All County bring separate actions against the Guarantor under the Guaranty?
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 on their obligations.
Furthermore, the guarantor's obligations remain even if All County grants the franchisee extensions of time, credit, or other allowances. Acceptance of partial payments, performance, or compromise/release of claims does not impact the Guaranty, which remains continuous and irrevocable during the term of the agreement and beyond. The Guaranty is binding on the guarantor and their successors, and it benefits All County and its successors. The guarantor cannot transfer their obligations without All County's prior written consent.
The agreement specifies that the obligations of the franchisee and guarantor are not considered fully discharged until all payments by the franchisee are no longer subject to being set aside or recouped. If any payments made by the franchisee to All County are later reversed or settled, the guarantor remains liable for All County's costs, interest, attorney's fees, and any related expenses. The guarantor also waives any rights to payments or claims against the franchisee that may arise from their obligations under the Guaranty.
This arrangement protects All County by providing an additional avenue for recovering owed amounts and covering expenses in case of franchisee default or financial instability. Prospective franchisees should carefully consider the implications of the Guaranty and ensure that any individual acting as a guarantor fully understands their obligations and potential liabilities.