If Angry Chickz assigns its rights, does the Guarantor still have the same obligations?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
bligations or otherwise.
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- Certain Covenants Incorporated. Sections 12.1 (Non-Competition), 12.2 (Confidential Information), 12.5 (Effect of Applicable Law), and 17.1 (Arbitration), and 17.3 (Time for Bringing Claims) of the FA are incorporated into this Continuing Guaranty by reference, and Guarantor agrees to comply with and perform each of such covenants as though fully set forth in this Continuing Guaranty as a direct and primary obligation of Guarantor.
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- Assignment Of Franchisor's Rights. Franchisor may, from time to time, without notice to Guarantor, assign or transfer any or all of the Obligations or any interest therein and, notwithstanding any assignment(s) or transfer(s), the Obligations shall be and remain Obligations for the purpose of this Continuing Guaranty. Each and every immediate and successive assignee or transferee of any of the Obligations or of any interest therein shall, to the extent of such party's interest in the Obligations, be entitled to the benefits of this Continuing Guaranty to the same extent as if such assignee or transferee were Franchisor.
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- Indulgences Not Waivers.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, if Angry Chickz assigns or transfers any of its obligations or interests, the guarantor's obligations remain in effect. The continuing guaranty extends to each successive assignee or transferee, granting them the same benefits as Angry Chickz to the extent of their interest in the obligations. This means that even if the franchise agreement is transferred to a new entity, the guarantor is still responsible for ensuring the franchisee meets its financial and operational commitments.
This provision protects Angry Chickz and its assignees by ensuring that the financial obligations tied to the franchise agreement are continuously guaranteed, regardless of changes in ownership or assignment. For a potential franchisee, this highlights the importance of the guarantor fully understanding the financial condition of the franchisee and the extent of their potential liability. The guarantor's obligations are not waived or diminished simply because Angry Chickz assigns its rights to another party.
The FDD also states that the continuing guaranty benefits Angry Chickz and its successors and assigns. All references to the franchisee include its successors and permitted assigns, and all references to the guarantor include the guarantor and the guarantor's successors and permitted assigns, even in the event of the guarantor's death. This ensures that the obligations of the guaranty remain in place, providing long-term security for Angry Chickz and any future assignees. The guarantor should seek legal counsel to fully understand the implications of this continuing obligation.