Does the franchisee need to waive their rights of subrogation against Amorino?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Guarantor waives: (1) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the undersigned's execution of and performance under this Guaranty; and (2) acceptance and notice of acceptance by Franchisor of Guarantor's undertakings under this Guaranty, notice of demand for payment of any indebtedness or non- performance of any obligations hereby guaranteed, protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed, and any other notices to which Guarantor may be entitled.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the franchisee themselves is not required to waive their rights to subrogation. However, if a guarantor is involved, they must waive these rights. Specifically, each guarantor waives all rights to payments and claims for reimbursement or subrogation against the franchisee that arise from the guarantor's execution and performance under the guaranty agreement.
This means that if a guarantor makes payments on behalf of the Amorino franchisee or fulfills obligations under the guaranty, the guarantor cannot then seek reimbursement or subrogation from the franchisee for those payments or obligations. This waiver is designed to protect Amorino and ensures that the guarantor bears the full risk of their guarantee without recourse to the franchisee.
This requirement is fairly standard in franchising when a personal guarantee is involved. Franchisors like Amorino want to ensure that the guarantor is fully committed to supporting the franchisee's obligations and cannot later attempt to recover losses from the franchisee, which could undermine the franchisee's financial stability and the franchise system as a whole. Prospective franchisees should ensure their guarantors fully understand this waiver before signing the guaranty agreement.