What does the Alloy personal guarantee waive regarding demand for payment?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned waives: (1) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (2) protest and notice of default to any party respecting the indebtedness or nonperformance of any obligations hereby guaranteed; and (3) any right he/she may have to require that an action be brought against the franchisee or any other person as a condition of liability.
In addition, the undersigned consents and agrees that: (1) the undersigned's liability will not be contingent or conditioned upon our pursuit of any remedies against the franchisee or any other person; and (2) such liability will not be diminished, relieved or otherwise affected by franchisee's insolvency, bankruptcy or reorganization, the invalidity, illegality or unenforceability of all or any part of the Franchise Agreement, or the amendment or extension of the Franchise Agreement with or without notice to the undersigned.
It is further understood and agreed by the undersigned that the provisions, covenants and conditions of this Guarantee will inure to the benefit of our successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the personal guarantee requires the guarantor to waive certain rights. Specifically, the guarantor waives the right to receive notice of demand for payment regarding any debt or unfulfilled obligations that are guaranteed. This means Alloy is not obligated to formally demand payment from the guarantor before pursuing collection or legal action.
Additionally, the guarantor waives the right to protest and receive notice of default concerning any debt or unfulfilled obligations under the guarantee. This implies that Alloy does not need to notify the guarantor of any defaults by the franchisee before taking action against the guarantor. The guarantor also relinquishes any right to insist that Alloy first sue the franchisee or any other party before seeking recourse from the guarantor.
Furthermore, the personal guarantee stipulates that the guarantor's liability is not dependent on Alloy pursuing remedies against the franchisee or any other person. The guarantor's obligations remain even if the franchisee becomes insolvent, bankrupt, or undergoes reorganization. The liability of the guarantor is not affected even if the Franchise Agreement is deemed invalid, illegal, or unenforceable, or if the agreement is amended or extended without notice to the guarantor. This comprehensive waiver and consent provision ensures that Alloy can seek recourse directly from the guarantor without being hindered by typical legal defenses or procedural requirements.