What is the purpose of the Aw Guaranty and Assumption of Obligations?
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. |
Each of the undersigned waives: (1) acceptance and notice of acceptance by the Company of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or non-performance of any obligations hereby guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or non-performance of any obligations hereby guaranteed; (4) any right he may have to require that an action be brought against Franchisee or any other person as a condition of liability; and (5) any and all other notices and legal or equitable defenses to which he may be entitled.
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.
Upon the execution of this Agreement, all Owners of the franchisee entity shall execute the Guaranty and Assumption of Obligations attached as Exhibit 2.
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 ensures that the franchisee will fulfill all obligations under the Franchise Agreement. If the franchisee is an entity, all owners must execute this guaranty. This agreement is made in consideration of Aw entering into the Franchise Agreement.
The guarantor personally guarantees that the franchisee will pay and perform every agreement and covenant in the Franchise Agreement. The guarantor also agrees to be personally bound by and liable for any breaches of the agreement, including monetary obligations and specific actions required or prohibited.
The guarantor waives several rights, including the right to receive notice of acceptance of the guaranty, demand for payment, or notice of default. They also waive the right to require Aw to take action against the franchisee before pursuing the guarantor. The guarantor consents to joint and several liability with other guarantors, immediate liability upon the franchisee's failure to perform, and the fact that their liability will not be contingent upon Aw pursuing remedies against the franchisee. The guaranty remains in effect during the term of the Franchise Agreement, even if Aw grants extensions or compromises claims.