Are the guarantors jointly and severally liable for the franchisee's obligations under the Aw franchise agreement?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of that certain Franchise Agreement of even date herewith (the "Agreement") by Rayyan Pizza Franchise LLC (the "Company"), each of the undersigned hereby personally and unconditionally, jointly and severally: (a) guarantees to the Company, and its successors and assigns, for the term of the Agreement and thereafter | as | provided | in | the | | ("Franchisee") will punctually | pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities.
Each of the undersigned consents and agrees that: (1) his direct and immediate liability under this Guaranty will be joint and several with all other current and future guarantors of Franchisee's obligations; (2) he will render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so; (3) such liability will not be contingent or conditioned upon pursuit by the Company of any remedies against Franchisee or any Other person; (4) such liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which the Company may from time to time grant to Franchisee or to any Other person, including without limitation, the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement; and (5) this Guarantee shall apply to any amounts recovered from Company as a preference, fraudulent transfer or otherwise in a bankruptcy or similar proceeding.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the guarantors are indeed jointly and severally liable for the franchisee's obligations. The Guaranty and Assumption of Obligations agreement specifies that each guarantor personally and unconditionally guarantees the franchisee's performance and payment of all obligations under the Franchise Agreement. This guarantee extends for the entire term of the agreement and any period thereafter as provided in the agreement.
Furthermore, the guarantors agree to be personally bound by and liable for any breaches of the Franchise Agreement, including both monetary obligations and requirements to take or refrain from specific actions. This means that Aw can pursue any one or all of the guarantors for the full amount of the franchisee's debt or non-performance, regardless of whether Aw has first pursued the franchisee.
The guarantors also waive several rights, including the right to require Aw to first bring an action against the franchisee before pursuing the guarantors. They consent to joint and several liability with all other current and future guarantors, and their liability is not contingent upon Aw pursuing remedies against the franchisee. The guaranty remains in effect even if Aw grants extensions of time or credit to the franchisee, or accepts partial payments, without modifying the guaranty. This comprehensive set of obligations and waivers underscores the significant responsibility assumed by anyone acting as a guarantor for an Aw franchise.