Under the Aw Guaranty and Assumption of Obligations, what does the guarantor consent and agree to regarding their liability?
Aw Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 39–40)
What This Means (2025 FDD)
According to Aw's 2025 Franchise Disclosure Document, the guarantor consents and agrees to several conditions regarding their liability under the Guaranty and Assumption of Obligations. The guarantor's liability is direct and immediate, and it is joint and several with all other current and future guarantors of the franchisee's obligations. This means that Aw can pursue any guarantor for the full amount of the franchisee's debt, regardless of whether other guarantors exist. The guarantor is responsible for rendering any payment or performance required under the franchise agreement upon demand if the franchisee fails or refuses to do so punctually. This obligation arises immediately upon the franchisee's failure, without Aw needing to first pursue remedies against the franchisee.
Furthermore, the guarantor's liability is not contingent or conditioned upon Aw pursuing any remedies against the franchisee or any other person. Aw is not required to take action against the franchisee before seeking payment or performance from the guarantor. The guarantor's liability will also not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence that Aw may grant to the franchisee or any other person. This includes the acceptance of any partial payment or performance, or the compromise or release of any claims. These actions by Aw do not modify or amend the Guaranty, which remains continuing and irrevocable during the term of the franchise agreement.
Finally, the guaranty applies to any amounts recovered from Aw as a preference, fraudulent transfer, or otherwise in a bankruptcy or similar proceeding. This ensures that even if Aw has to return payments received from the franchisee due to bankruptcy proceedings, the guarantor remains liable for the original obligation. The guarantor also waives several rights, including acceptance and notice of acceptance by Aw, notice of demand for payment, protest and notice of default, any right to require an action against the franchisee, and any other legal or equitable defenses. This comprehensive set of agreements ensures that the guarantor's obligations are robust and enforceable, providing Aw with significant protection against franchisee default.