What is the 'Continuing Guaranty' defined as in the Angry Chickz franchise agreement?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Financial Condition Of Franchisee.
Guarantor represents and warrants that it is fully aware of the financial condition of Franchisee, and Guarantor delivers this Continuing Guaranty based solely upon its own independent investigation of Franchisee's financial condition.
Guarantor waives any duty on the part of Franchisor to disclose to Guarantor any facts it may now or hereafter know about Franchisee, regardless of whether Franchisor has reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor.
Guarantor knowingly accepts the full range of risk encompassed within a contract of "Continuing Guaranty" which includes, without limitation, the possibility that Franchisee will contract for additional obligations and indebtedness for which Guarantor may be liable hereunder.
Representation and Warranty.
Guarantor represents and warrants to Franchisor that this Continuing Guaranty has been duly executed and delivered by
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the Continuing Guaranty is a legally binding agreement where a guarantor assures the franchisor that the franchisee will fulfill all obligations under the Franchise Agreement. This means that if the franchisee fails to meet their financial or contractual duties, the guarantor becomes responsible for those obligations.
The document specifies several key aspects of the Continuing Guaranty. It remains in effect even after the death of the guarantor, and its obligations are joint and several if there is more than one guarantor. This means each guarantor is fully liable for all obligations. The guarantor also acknowledges being fully aware of the franchisee's financial condition and waives any duty of Angry Chickz to disclose any facts about the franchisee's financial situation.
Furthermore, the guarantor accepts the full range of risks associated with the Continuing Guaranty, including potential liability for additional obligations and indebtedness the franchisee may incur. The agreement is governed by California law, and any modifications must be in writing and signed by both the guarantor and Angry Chickz. The guarantor also acknowledges having the opportunity to seek advice from legal counsel before executing the guaranty.
In essence, the Continuing Guaranty is a significant commitment that prospective Angry Chickz franchisees and their guarantors should carefully consider. It transfers substantial risk to the guarantor, who should conduct thorough due diligence on the franchisee's financial stability and understand the full scope of potential liabilities.