Is the All Team Funding Agreement guarantee a guarantee of payment or a guarantee of collection?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
We hereby waive all presentments, demands, notices of nonperformance, protests, notices of acceptance of our guarantee or USER's incurring of new or additional indebtedness, and any other formality that might otherwise be a condition to our absolute liability hereunder. This is a guarantee of payment and not of collection. We also waive any right to consent to or be notified of any indulgence, extension, waiver or other concession that may be granted USER and agree that any such action shall not affect our liability hereunder.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Funding Agreement guarantee is a guarantee of payment, not a guarantee of collection. This means that the guarantor is responsible for ensuring that All Team receives payment, regardless of whether All Team has attempted to collect from the user first.
In practical terms, this is a significant distinction. A guarantee of collection would typically require All Team to first exhaust all reasonable efforts to collect from the user before pursuing the guarantor. However, with a guarantee of payment, All Team can seek payment directly from the guarantor as soon as the user defaults, without needing to demonstrate that collection from the user is impossible or impractical.
This type of guarantee provides All Team with a stronger assurance of payment and reduces the risk associated with the Funding Agreement. For the guarantor, it represents a more significant commitment, as they are immediately liable for the user's obligations upon default. The guarantor also waives certain rights, such as presentments, demands, and notices of nonperformance, further solidifying their obligation to ensure payment.