Does the Guarantor of an All County franchise guarantee both monetary and non-monetary obligations of the Franchisee?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
Based on the 2025 All County Franchise Disclosure Document, the Guarantor's obligations extend to both monetary and non-monetary aspects of the Franchise Agreement. The guarantor's liability is not contingent on All County first pursuing remedies against the franchisee or any other party. This means All County can seek recourse directly from the guarantor without having to exhaust other options. The guarantor's obligations remain in effect throughout the term of the agreement and beyond, and cannot be altered by any extensions of time or credit granted to the franchisee.
The guarantor's responsibilities are comprehensive, covering all the franchisee's duties and liabilities to All County. This includes ensuring all payments are made and that all other obligations under the Franchise Agreement are fulfilled. The guarantor also agrees to indemnify All County against any losses or expenses related to the Reconciliation Assistance Program, including legal fees and other costs. This indemnification remains in effect even after the termination or expiration of the Franchise Agreement.
Furthermore, the guarantor waives any rights to payments or claims for reimbursement against the franchisee that may arise from fulfilling their obligations under the guaranty. This waiver ensures that the guarantor cannot seek compensation from the franchisee for amounts paid to All County. The guarantor is bound by the terms of the guaranty, which benefits All County and its successors and assigns. The guarantor cannot transfer their obligations without All County's prior written consent, ensuring that the guaranty remains in place with a responsible party.
In practical terms, this means that if the franchisee fails to meet their financial or operational obligations, All County can turn to the guarantor for resolution. This provides All County with an additional layer of security and assurance that the terms of the Franchise Agreement will be upheld. Prospective franchisees should carefully consider the implications of the guaranty and ensure that any potential guarantors fully understand their responsibilities and liabilities before signing the agreement.