Does Aplus need to exhaust its remedies against the Developer before seeking recovery from me under the Guaranty?

According to Aplus's 2024 Franchise Disclosure Document, Aplus does not need to exhaust its remedies against the Developer before seeking recovery from the guarantor under the Guaranty. As a guarantor, you agree to pay all amounts due under the Guaranty within 14 days after receiving notice from Aplus that the Developer has failed to make the required payment.

This means that Aplus can seek payment directly from the guarantor if the Developer fails to pay, without first having to pursue legal action or other remedies against the Developer. This clause is designed to protect Aplus and ensure prompt payment of amounts owed under the Development Agreement.

This arrangement benefits Aplus by streamlining the collection process in case of default. However, it places a significant responsibility on the guarantor, who must be prepared to cover the Developer's debts quickly if the Developer defaults. Prospective franchisees acting as guarantors should carefully assess the financial stability and payment history of the Developer to understand the potential risk exposure.