Does the Angry Chickz Continuing Guaranty cover obligations that are indirect?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
of any other obligor primarily or secondarily obligated with respect to any of the Obligations; (5) demand payment or performance of any of the Obligations from Guarantor at any time or from time to time, whether or not Franchisor shall have exercised any of its rights or remedies with respect to any property securing any of the Obligations or any obligation under this Continuing Guaranty; or (6) proceed against any other obligor primarily or secondarily liable for payment or
4. Specific Waivers.
- 4.1 Without limiting the generality of any other provision of this Continuing Guaranty, Guarantor expressly waives: (i) notice of the acceptance by Franchisor of this Continuing Guaranty; (ii) notice of the existence, creation, payment, nonpayment, performance or nonperformance of all or any of the Obligations; (iii) presentment, demand, notice of dishonor, protest, notice of protest and all other notices whatsoever with respect to the payment or performance of the Obligations or the amount thereof or any payment or performance by Guarantor under this Agreement; (iv) all diligence in collection or protection of or realization upon the Obligations or any thereof, any obligation under this Agreement or any security for or guaranty of any of the foregoing; (v) any right to direct or affect the manner or timing of Franchisor's enforcement of its rights or remedies; (vi) any and all defenses which would otherwise arise upon the occurrence of any event or contingency described in Paragraph 1 hereof or upon the taking of any action by Franchisor permitted under this Agreement; (vii) any defense, right of set-off, claim or counterclaim whatsoever and any and all other rights, benefits, protections and other defenses available to Guarantor now or at any time hereafter, including, without limitation, under any suretyship statute of the State of California or where the guarantor is domiciled; and (viii) all other principles or provisions of law, if any, that conflict with the terms of this Continuing Guaranty, including, without limitation, the effect of any circumstances that may or might constitute a legal or equitable discharge of a guarantor or surety.
- 4.2 Guarantor waives all rights and defenses arising out of an election of remedies by Franchisor.
- 4.3 Guarantor further waives all rights to revoke this Continuing Guaranty at any time, and all rights to revoke any agreement executed by Guarantor at any time to secure the payment and performance of Guarantor's obligations under this Continuing Guaranty.
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- Subordination; Subrogation. Guarantor subordinates any and all indebtedness of Franchisee to Guarantor to the full and prompt payment and performance of all of the Obligations. Franchisor shall be entitled to receive payment of all Obligations prior to Guarantor's receipt of payment of any amount of any indebtedness of Franchisee to Guarantor. Guarantor will not exercise any rights which it may acquire by way of subrogation under this Continuing Guaranty, by any payment hereunder or otherwise, until all of the Obligations have been paid in full, in cash, and Franchisor shall have no further obligations to Franchisee under the Obligations or otherwise.
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Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
Based on the 2025 Angry Chickz Franchise Disclosure Document, the Continuing Guaranty includes a waiver where the guarantor acknowledges they are aware that the franchisee may contract for additional obligations and indebtedness for which the guarantor may be liable. The guarantor also waives certain notices regarding the obligations. Specifically, the guarantor waives notice of the existence, creation, payment, or nonpayment of the obligations. They also waive any defenses that would arise from events described in the agreement or actions taken by Angry Chickz.
Additionally, the guarantor waives any right to direct or affect how Angry Chickz enforces its rights or remedies. This means the guarantor cannot dictate the timing or manner in which Angry Chickz pursues its legal options. The guarantor also waives any defenses, rights of set-off, claims, or counterclaims, including those available under suretyship statutes in California or the guarantor's domicile. This comprehensive waiver suggests that the guarantor is agreeing to be bound by a wide range of potential obligations, including those that might be considered indirect.
Furthermore, the guarantor waives all rights to revoke the Continuing Guaranty or any related agreements securing their obligations. This ensures that the guaranty remains in effect and enforceable, even if circumstances change. The document also states that the guarantor is responsible for understanding the franchisee's financial condition and is not relying on Angry Chickz to disclose any information about the franchisee's financial situation. This places the burden of due diligence on the guarantor.
In summary, while the term "indirect obligations" is not explicitly used, the broad waivers and acknowledgments within the Continuing Guaranty indicate that the guarantor is likely responsible for a wide range of obligations, including those that might be considered indirect. A prospective Angry Chickz franchisee who is asked to sign a Continuing Guaranty should carefully review the document with legal counsel to fully understand the scope of their potential liability.