Can the Guaranty and Assumption of Obligations for Americas Best Value Inn be modified by partial payments?
Americas_Best_Value_Inn Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (1) his or her direct and immediate liability under this Guaranty will be joint and several, both with Franchisee and among other guarantors; (2) he or she will render any payment or performance required under the Agreements upon demand if Franchisee fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchisee or any other person; (4) this 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 Agreements; (5) this liability will continue unchanged by the occurrence of any bankruptcy with respect to Franchisee or any assignee or successor of Franchisee, and his or her obligations to make payment or render performance in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Franchisee or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency; and (6) at our request, the undersigned shall present updated financial information to us as reasonably necessary to demonstrate his or her ability to satisfy the financial obligations of Franchisee under the Agreements.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to the 2025 Americas Best Value Inn Franchise Disclosure Document, the Guaranty and Assumption of Obligations is not modified or amended by the acceptance of partial payments. The guarantor's liability remains unchanged during the term of the agreements, regardless of any extensions of time, credit, or other allowances granted to the franchisee. This ensures that the guarantor's obligations are continuous and irrevocable.
This provision protects Americas Best Value Inn by ensuring that the guarantor remains fully liable for the franchisee's obligations, even if the franchisor accepts partial payments or makes other concessions to the franchisee. The guarantor cannot claim that their obligations have been reduced or eliminated due to such actions. This clause is designed to provide Americas Best Value Inn with a consistent and reliable source of financial security throughout the term of the franchise agreement.
For a prospective Americas Best Value Inn franchisee, this means that if a third party guarantees their obligations, that guarantor will remain fully responsible regardless of any payment arrangements or modifications made between the franchisee and Americas Best Value Inn. It is crucial for potential guarantors to understand the full extent of their obligations and the fact that these obligations will not be diminished by partial payments or other accommodations. They should seek legal counsel to fully understand the implications of the Guaranty and Assumption of Obligations before signing.