Does the guarantor for an Anago unit franchisee waive any defense based on irregularities in the creation of any obligations?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
You hereby waive:
- a. acceptance and notice of acceptance by SUBFRANCHISOR of the foregoing guaranty;
- b. notices of demand for payment of any indebtedness or nonperformance by UNIT FRANCHISEE of any indebtedness or nonperformance by UNIT FRANCHISEE of any of the Obligations;
- c. presentment or protest of any instrument and notice thereof; and Notice of Default or intent to accelerate with respect to the indebtedness or nonperformance of any of the Obligations;
- d. any right You may have to require that an action be brought against UNIT FRANCHISEE or any other person as a condition of liability;
- e. the defense of the statute of limitations in any action hereunder or for the collection or performance of any Obligation;
- f. any and all rights to payments, indemnities and claims for reimbursement or subrogation that You may have against UNIT FRANCHISEE arising from Your execution of and performance under this Guaranty;
- g. any defense based on any irregularity or defect in the creation of any of the Obligations or modification of the terms and conditions of performance thereof;
- h. any defense based on the failure of SUBFRANCHISOR or any other party to take, protect, perfect or preserve any right against and/or security granted by the UNIT FRANCHISEE or any other party; and
- i. any and all other notices and legal or equitable defenses to which You may be entitled.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a guarantor for a unit franchisee explicitly waives any defense related to irregularities or defects in the creation of any obligations. This waiver is part of a broader set of waivers that the guarantor agrees to as part of the guaranty. The guarantor is essentially agreeing to be fully responsible for the franchisee's obligations, regardless of any potential issues in how those obligations were initially established or modified. This ensures that Anago can pursue the guarantor for any debts or non-performance by the franchisee without facing challenges based on the formation of the underlying agreements.
This waiver includes waiving rights to require Anago to first pursue action against the unit franchisee, defenses related to statutes of limitations, and rights to payments or claims against the unit franchisee. The guarantor also consents to the continuation of the guaranty even if there are extensions, modifications, or amendments to the Unit Franchise Agreement. The guarantor's liability is construed as absolute, unconditional, continuing, and unlimited, irrespective of the regularity, validity, or enforceability of the obligations, even in cases of bankruptcy.
For a prospective Anago franchisee, this means that anyone acting as a guarantor needs to fully understand the extent of their commitment. The guarantor's personal assets are at risk should the franchisee default, and the guarantor cannot use defects in the obligation's creation as a shield. This is a significant commitment and should be carefully considered with legal counsel. It is also important to note that disputes arising under the Guaranty are subject to arbitration as described in the Unit Franchise Agreement.
In the context of franchise agreements, it is common for franchisors to seek guarantees to ensure financial security and commitment from franchisees. However, the scope of waivers and the extent of the guarantor's obligations can vary. Prospective guarantors should carefully review all the waivers and obligations outlined in the guaranty agreement and seek legal advice to fully understand their potential liabilities and risks before signing.