Is the personal guaranty for a Bang Cookies franchise continuing and irrevocable?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree that**: (a) your direct and immediate liability under this guaranty shall be joint and several with Franchisee and all other signatories to this Agreement; (b) you will render any payment required under the
Franchise Agreement and the Ancillary Agreements upon demand if Franchisee fails or refuses punctually to do so; (c) your liability shall not be contingent or conditioned upon pursuit by us of any remedies against Franchisee or any other person; and (d) liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence that we may grant to Franchisee or to any other person, including the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend this guarantee, which shall be continuing and irrevocable during the term of each of the Franchise Agreement and the Ancillary Agreements and following the termination, expiration or Transfer of each of the Franchise Agreement and the Ancillary Agreements to the extent any financial obligations under any such Franchise Agreement and Ancillary Agreements survive such termination, expiration or Transfer. This guaranty will continue unchanged by the occurrence of any bankruptcy with respect to Franchisee or any assignee or successor of Franchisee or by any abandonment of one or more of the Franchise Agreement and/or and Ancillary Agreements by a trustee of Franchisee. Neither your obligation to make payment in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Franchisee or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the Franchise Owner and Spouse Agreement and Guaranty includes a personal guaranty that is both continuing and irrevocable. This means that the individual signing the guaranty remains liable for the financial obligations of the Bang Cookies franchise, even if the franchise agreement is terminated, expires, or is transferred. The guarantor's obligations persist as long as any financial obligations survive the termination, expiration, or transfer of the franchise agreement and ancillary agreements.
Specifically, the document states that the guaranty remains in effect during the term of the Franchise Agreement and Ancillary Agreements. It also extends beyond the termination, expiration, or transfer of these agreements to cover any financial obligations that may still exist. This ensures that Bang Cookies can pursue the guarantor for any outstanding debts or liabilities, regardless of changes in the franchise's status or ownership.
The guaranty is not affected by events such as bankruptcy of the franchisee or any assignee or successor. It also remains unchanged if the franchisee abandons the Franchise Agreement or Ancillary Agreements. The guarantor's obligation to make payments and Bang Cookies's ability to enforce the guaranty are not limited or impaired by any changes to the franchisee's liability or any limitations resulting from bankruptcy laws or court decisions. This provides Bang Cookies with a strong assurance of financial security throughout the duration of the franchise agreement and beyond, as it relates to surviving financial obligations.