Is GoTo Foods a party to the Franchise Agreement that Auntie Annes signs 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.
The Guarantor signs this guarantee at Atlanta, Georgia on this 29th day of March 2024.
Guarantor:
GOTO FOODS SYSTEMS LLC
By: Name: Michael J. Dixon
Title: Chief Financial Officer
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 105–106)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, GoTo Foods is not a direct party to the Franchise Agreement between Auntie Anne's Franchisor SPV LLC and the franchisee. However, GoTo Foods Systems LLC provides a guarantee of performance, ensuring that it will assume the duties and obligations of Auntie Anne's Franchisor SPV LLC under the Franchise Agreement. This guarantee remains in effect until all obligations of the Franchisor are satisfied or the liability of the Franchisor to its franchisees under the Franchise Agreement has been completely discharged.
This arrangement means that while Auntie Anne's Franchisor SPV LLC is the entity the franchisee contracts with, GoTo Foods Systems LLC provides a financial assurance that the obligations within the agreement will be met. This guarantee is binding on GoTo Foods Systems LLC and its successors and assigns, offering an additional layer of security for the franchisee. The guarantee is signed by the Chief Financial Officer of GoTo Foods Systems LLC on March 29, 2024.
In the event that Auntie Anne's Franchisor SPV LLC fails to meet its obligations, GoTo Foods Systems LLC is legally bound to step in and fulfill those responsibilities. This guarantee does not waive the requirement for the Franchisor to receive notice of default. This setup is common in franchising where a parent company provides financial backing to a subsidiary franchisor, assuring franchisees of the franchisor's ability to meet its commitments.