Does GoTo Foods guarantee Auntie Annes' obligations under other agreements signed with franchisees?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
For value received, GoTo Foods Systems LLC, a Delaware limited liability company (the "Guarantor"), located at 5620 Glenridge Drive NE, Atlanta, Georgia 30342, absolutely and unconditionally guarantees to assume the duties and obligations of Auntie Anne's Franchisor SPV LLC, located at 5620 Glenridge Drive NE, Atlanta, Georgia 30342 (the "Franchisor"), under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2024 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered into with franchisees and amended, modified or extended from time to time. This Guarantee continues until all such obligations of the Franchisor under its franchise registrations and the Franchise Agreement are satisfied or until the liability of Franchisor to its franchisees under the Franchise Agreement has been completely discharged, whichever first occurs. The Guarantor is not discharged from liability if a claim by a franchisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and its successors and assigns.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 105–106)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, GoTo Foods Systems LLC provides a guarantee of performance related to Auntie Annes' franchise registration and Franchise Agreement. Specifically, GoTo Foods Systems LLC absolutely and unconditionally guarantees to assume the duties and obligations of Auntie Anne's Franchisor SPV LLC under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2024 Franchise Disclosure Document.
This guarantee remains in effect until all obligations of Auntie Annes Franchisor SPV LLC under its franchise registrations and the Franchise Agreement are satisfied, or until the liability of Auntie Annes Franchisor SPV LLC to its franchisees under the Franchise Agreement has been completely discharged. The guarantee specifies that GoTo Foods Systems LLC will not be released from liability if a franchisee's claim against Auntie Annes Franchisor SPV LLC remains outstanding, and waives the requirement for notice of acceptance.
This guarantee is a significant assurance for prospective Auntie Annes franchisees, as it provides an additional layer of financial security. It ensures that even if Auntie Annes Franchisor SPV LLC faces financial difficulties, GoTo Foods Systems LLC is obligated to fulfill the franchisor's commitments under the Franchise Agreement. This type of guarantee is not uncommon in franchising, especially when the franchisor is a subsidiary of a larger entity, as it leverages the parent company's stronger financial position to provide greater security to franchisees.