Does the All County guarantor waive rights to reimbursement or subrogation against the franchisee?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, the guarantor does waive rights to payments and claims for reimbursement or subrogation against the franchisee. This waiver is a condition of the Guaranty agreement. This means that if the guarantor makes any payments or incurs costs on behalf of the franchisee, they cannot seek reimbursement from the franchisee for those amounts.
This waiver is significant because it places the full financial burden of the franchise agreement on the guarantor in certain situations. Typically, a guarantor might have recourse to recover funds they paid out if the primary debtor (the franchisee) defaults. However, this clause eliminates that right, increasing the guarantor's risk.
Prospective All County franchisees should carefully consider the implications of this waiver and ensure that any guarantor understands they are giving up their right to seek reimbursement from the franchisee. It is advisable for guarantors to seek independent legal counsel to fully understand the risks involved before signing the Guaranty.