Is the guarantor's liability under the Aw Guaranty and Assumption of Obligations joint and several?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given this day of , 20, by |
|---|
| 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 |
| Agreement, |
| that |
| ("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. |
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations specifies that the liability of the undersigned guarantors is both joint and several. This means that each guarantor is individually liable for the full amount of the franchisee's obligations to Aw, as well as collectively liable with all other guarantors.
For a prospective Aw franchisee, this has significant implications. If the franchisee fails to meet its financial or operational obligations under the Franchise Agreement, Aw can pursue any one or all of the guarantors for the full amount owed or for complete performance. This provides Aw with a strong degree of financial security, as they are not limited to pursuing only the franchisee or dividing the liability among multiple parties.
The guarantor(s) also consent and agree that their direct and immediate liability under this Guaranty will be joint and several with all other current and future guarantors of Franchisee's obligations. They will render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so and such liability will not be contingent or conditioned upon pursuit by the Company of any remedies against Franchisee or any Other person. The liability will also 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. This Guarantee shall apply to any amounts recovered from Company as a preference, fraudulent transfer or otherwise in a bankruptcy or similar proceeding.
Therefore, anyone considering acting as a guarantor for an Aw franchise should fully understand the extent of this commitment and the potential financial risks involved. They should seek legal counsel to fully understand the implications before signing the Guaranty and Assumption of Obligations.