Does the Guarantor for an Angry Chickz franchise waive all diligence in collection or protection of the Obligations?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, the Guarantor expressly waives all diligence in collection or protection of or realization upon the Obligations. This waiver extends to any obligation under the agreement or any security for or guaranty of any of the foregoing.
In simpler terms, this means that if a franchisee fails to meet their financial obligations, Angry Chickz can pursue the guarantor without having to exhaust all other possible avenues of collection or protection. The guarantor cannot claim that Angry Chickz should have tried harder to recover the debt from the franchisee directly before seeking recourse from the guarantor.
This is a significant point for anyone considering acting as a guarantor, as it limits their defenses and increases their potential liability. It's common in franchising for a franchisor to require a personal guarantee, especially from a new franchisee, to ensure financial stability and commitment to the business. Prospective guarantors should carefully consider their financial situation and risk tolerance before signing such an agreement, as they are taking on a substantial responsibility.