For All Team, what liabilities are excluded from the guarantee after ATFC receives written notice of revocation?
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, the guarantee provided by each guarantor remains effective until ATFC receives written notice of revocation. This means that even events like the death of a guarantor (in which case their estate is bound), the release of another guarantor, or changes in the USER's business structure do not terminate the guarantee until ATFC receives formal written notice.
However, once ATFC receives written notice of revocation, the guarantee excludes specific types of liabilities. Specifically, the revocation only excludes liabilities that arise after the receipt of the notice and are not connected to liabilities that existed before the notice. This means that the guarantor remains responsible for all obligations and indebtedness that were already in place or contracted for before ATFC received the revocation notice.
In practical terms, this clause protects All Team from guarantors attempting to avoid their obligations retroactively. For a prospective franchisee, this highlights the importance of understanding the full extent of the guaranteed obligations before signing the Funding Agreement Guarantee. Franchisees should carefully consider the potential long-term financial implications and seek legal counsel to fully understand their responsibilities as guarantors.