Under the Aw Guaranty and Assumption of Obligations, is the guarantor's liability contingent upon the Company pursuing remedies against the Franchisee?
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's liability under the Guaranty and Assumption of Obligations is not contingent upon Aw pursuing remedies against the franchisee. The guarantor provides an unconditional guarantee to Aw, ensuring the franchisee fulfills all obligations and agreements outlined in the franchise agreement. This guarantee extends to all undertakings, agreements, and covenants set forth in the agreement, covering both monetary obligations and required actions.
The guarantor's obligations are triggered immediately if the franchisee fails to meet their responsibilities. The guarantor is directly and immediately liable, jointly and severally, with any other guarantors. This means Aw can seek recourse directly from the guarantor without first having to pursue the franchisee.
Specifically, the guarantor waives any right to require Aw to take action against the franchisee as a condition of their liability. The guarantor's liability remains unaffected by any extensions of time, credit, or other allowances Aw may grant to the franchisee. This ensures that the guarantee remains in effect throughout the term of the agreement, regardless of any modifications or concessions Aw makes to the franchisee. This arrangement protects Aw by ensuring that the obligations under the franchise agreement are met, even if the franchisee defaults.