Is the Guaranty for an All County franchise one of payment and performance, or of collection?
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, the guaranty required is one of payment and performance, and not of collection. This means that the guarantor's liability is not contingent on All County first pursuing remedies against the franchisee or any other person. The guarantor is immediately liable for the franchisee's obligations.
This has significant implications for anyone acting as a guarantor for an All County franchise. The guarantor cannot require All County to first attempt to recover from the franchisee before seeking payment from the guarantor. The guarantor's obligations are direct and immediate.
Furthermore, the guarantor's liability will not be affected by any extensions of time or credit that All County may grant to the franchisee. Even if All County accepts partial payments or compromises claims with the franchisee, the guaranty remains in full effect. This ensures that All County has a consistent and reliable source of recourse in case of franchisee default, regardless of any arrangements made with the franchisee directly.
The guarantor also waives any rights to payments or claims for reimbursement against the franchisee that may arise from their performance under the guaranty. This waiver further strengthens All County's position by preventing the guarantor from seeking compensation from the franchisee for amounts paid under the guaranty, which could potentially undermine the franchisee's financial stability and ability to meet their obligations to All County.