What is the relationship between the Franchise Agreement and the Guaranty within the Anago franchise system?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
een willing to execute the Franchise Agreement with SUBFRANCHISOR solely on SUBFRANCHISOR be personally obligated SUBFRANCHISOR (and with each other owner of SUBFRANCHISOR) for the performance of each and every obligation of SUBFRANCHISOR (and its owners) under the Franchise Agreement, any amendments or modifications to the Franchise Agreement, any extensions or renewals of the Franchise Agreement, and under each and every agreement ancillary to the Franchise Agreement that has been or hereafter may be entered by SUBFRANCHISOR with FRANCHISOR or with FRANCHISOR's affiliates related to the Franchise Agreement or the business conducted by SUBFRANCHISOR pursuant thereto (all of the aforementioned agreements are collectively referred to as the "Anago Agreements"). | You the condition that each owner of and jointly and severally liable with |
-
- GUARANTOR'S Covenants, Representations and Guaranty. In consideration of and as an inducement to the execution of the Franchise Agreement by FRANCHISOR, you hereby personally, irrevocably and unconditionally:
- a. represent and warrant to FRANCHISOR that the exhibits/attachments to the Franchise Agreement are accurate and complete;
- b. guarantee the prompt payment and performance of all Obligations (as hereinafter defined) of SUBFRANCHISOR under the Anago Agreements;
- c. agree to be personally bound by, and personally liable for the breach of, each and every provision in the Franchise Agreement and each and every provision in any of the Anago Agreements, as if you were the SUBFRANCHISOR; and
d. agree not to divert any assets to other parties in order to avoid any debt covered by this Guaranty.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Guaranty is directly linked to the Franchise Agreement. As an inducement for Anago to enter into the Franchise Agreement with the subfranchisor, the guarantor personally and unconditionally guarantees the subfranchisor's prompt payment and performance of all obligations under the Anago Agreements. This means the guarantor is essentially vouching for the subfranchisor's ability to meet all financial and operational requirements outlined in the franchise agreement.
Furthermore, the guarantor agrees to be personally bound by and liable for any breaches of the Franchise Agreement and any other Anago Agreements, as if they were the subfranchisor themselves. This extends to all debts, liabilities, and obligations of the subfranchisor to Anago, including costs of collection and enforcement, and the performance of every covenant and condition in the Anago Agreements. The guarantor also commits not to divert assets to avoid debts covered by the Guaranty.
The Guaranty remains in effect even if there are extensions, modifications, or amendments to the Franchise Agreement or other Anago Agreements, and the guarantor waives any notice of such changes. The guarantor's liability is absolute, continuing, and unlimited, regardless of the validity or enforceability of the obligations. Disputes arising under the Guaranty are subject to arbitration as described in the Unit Franchise Agreement. This close relationship between the Guaranty and Franchise Agreement ensures Anago has recourse to the guarantor should the subfranchisor fail to meet their obligations.