How soon after receiving notice from Aplus must I pay amounts due under the Guaranty?

According to Aplus's 2024 Franchise Disclosure Document, if you provide a guaranty for the Developer's obligations under the Development Agreement, you are obligated to promptly and fully pay all amounts owed by the Developer. Specifically, you must 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 as a guarantor, you are stepping in to ensure Aplus receives payment if the primary party (the Developer) defaults. Aplus does not need to first pursue the Developer for the debt before seeking payment from you. This clause in the guaranty agreement is designed to protect Aplus's financial interests by providing a direct and relatively quick recourse for recovering owed amounts.

It is important to understand that this obligation is triggered by a simple notice from Aplus indicating the Developer's failure to pay. As the guarantor, you should ensure you have the financial capacity to cover the Developer's potential debts within the specified 14-day period to avoid further legal action or damage to your relationship with Aplus. This type of arrangement is common in franchising, where franchisors seek to minimize their financial risk by securing guarantees from individuals or entities associated with the franchisee.