Is the Aplus Guaranty considered a general and continuing guaranty?

According to Aplus's 2024 Franchise Disclosure Document, the Guaranty provided by the guarantor is explicitly defined as a general and continuing guaranty. This means the guaranty covers all indebtedness of the debtor, including several obligations of each entity if the debtor involves more than one entity, as well as their joint obligations. This includes obligations incurred even after a notice of revocation, specifically those incurred at least ten days after Sunoco receives written notice of revocation.

For a prospective Aplus franchisee, this implies a significant responsibility for anyone acting as a guarantor. The guarantor's obligations extend to all debts, and revocation of the guaranty only applies to future agreements or debts entered into at least ten days after the revocation notice is received. This continuing nature means that past obligations remain covered by the guaranty, even after revocation.

The FDD specifies that to revoke the Guaranty, the guarantor must send a notice to Sunoco via certified mail or overnight delivery to a specific address. Any payments made after the receipt of the revocation notice will be applied as Sunoco chooses. This clause protects Sunoco by ensuring that the guaranty remains effective for a period even after a revocation notice, providing a buffer for existing financial arrangements.

This type of general and continuing guaranty is common in franchising to protect the franchisor's financial interests. However, potential guarantors should carefully consider the long-term implications and potential liabilities before agreeing to such terms, as the obligations are broad and continue until properly revoked, with limitations on the revocation's effectiveness.