If Azal Coffee is required to enforce the Guaranty, what do the Guarantors have to reimburse Azal Coffee for?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
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- If Franchisor is required to enforce this Guaranty in any judicial or arbitration proceeding or any appeals, each Guarantor, jointly and severally, must reimburse Franchisor for its enforcement costs. Enforcement costs include actual accountants', attorneys', attorney's assistants', arbitrators' and expert witness fees, costs of investigation and proof of facts, court costs, arbitration filing fees, other litigation expenses and travel and living expenses, whether incurred prior to, in preparation for, or in contemplation of the filing of any written demand, claim, action, hearing or proceeding to enforce this Guaranty.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, if Azal Coffee has to enforce the Guaranty in a judicial or arbitration proceeding, the Guarantors must reimburse Azal Coffee for its enforcement costs. These costs include actual accountants', attorneys', attorney's assistants', arbitrators' and expert witness fees.
Additionally, the Guarantors are responsible for reimbursing Azal Coffee for costs of investigation and proof of facts, court costs, arbitration filing fees, other litigation expenses, and travel and living expenses. These expenses apply whether they are incurred before, during the preparation for, or when contemplating filing any written demand, claim, action, hearing, or proceeding to enforce the Guaranty.
This means that if a franchisee defaults and Azal Coffee has to pursue legal action against the guarantors to recover what's owed, the guarantors will be responsible not only for the original debt but also for all the legal and related costs Azal Coffee incurs in pursuing the case. This could potentially add a significant amount to the total financial burden on the guarantors.