Under the Aw Guaranty and Assumption of Obligations, what is the guarantor's responsibility regarding the Franchisee's undertakings?
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 agreement stipulates the guarantor's responsibilities concerning the franchisee's undertakings. The guarantor provides a personal and unconditional guarantee to Aw, ensuring that the franchisee will fulfill all obligations, agreements, and covenants as outlined in the Franchise Agreement. This guarantee extends for the entire term of the agreement and any period thereafter as specified in the agreement.
Specifically, the guarantor commits to ensuring that the franchisee punctually pays and performs all required actions. Additionally, the guarantor agrees to be personally bound by and liable for any breaches of the Franchise Agreement. This includes both monetary obligations and the responsibility to take or refrain from specific actions or activities as detailed in the agreement.
This means that if the franchisee fails to meet their obligations, Aw can seek recourse directly from the guarantor. The guarantor's liability is joint and several with any other guarantors, meaning Aw can pursue any guarantor for the full amount of the obligation. This arrangement provides Aw with an additional layer of security, ensuring that the franchisee's commitments are met, and it places a significant responsibility on the guarantor to oversee the franchisee's compliance with the Franchise Agreement.