For All Team, can a guarantor's obligations be affected by the release of another guarantor?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
As to each guarantor, this guarantee shall continue in effect until ATFC has received written notice of revocation, notwithstanding the death of such guarantor (whose estate shall be bound until receipt of such notice), the release of any other guarantor, or the dissolution, liquidation, termination of business, bankruptcy, acquisition, merger, reorganization, or any other change in the nature or form of the business of USER, until all of USER's obligations and indebtedness under said Agreement shall have been fully performed and paid. No revocation or termination hereof shall affect rights or obligations under this guarantee with respect to obligations or indebtedness arising or contracted for prior to ATFC's receipt of written notice thereof, and any revocation or termination shall exclude from this guarantee only liabilities arising after such receipt that are unconnected with liabilities theretofore arising and transactions theretofore entered into.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, a guarantor's obligations remain in effect even if another guarantor is released. The guarantee continues until All Team Franchise Corporation (ATFC) receives written notice of revocation from the guarantor, regardless of the release of any other guarantor. This means that if multiple individuals guarantee a franchisee's obligations, the release of one guarantor does not automatically relieve the remaining guarantors of their responsibilities. Each guarantor is independently responsible until ATFC receives their individual written revocation.
This provision protects All Team by ensuring that the financial obligations are covered even if one or more guarantors are no longer part of the agreement. It places a significant responsibility on each guarantor to formally revoke their guarantee with written notice to ATFC if they wish to be released from their obligations. The guarantor's estate is also bound until such notice is received, adding another layer of security for All Team.
For a prospective All Team franchisee, this highlights the importance of understanding the full extent of the guarantee. If considering having multiple guarantors, it's crucial to recognize that the release of one does not impact the obligations of others. Each guarantor must act independently to revoke their guarantee. This clause aims to provide All Team with continuous financial security throughout the term of the Funding Agreement, irrespective of changes in the guarantor pool.