Does an amendment or extension of the Belocal Agreement affect the Principal's liability under the Principal's Undertaking?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Principal consents and agrees that: (1) Principal's liability will not be contingent or conditioned upon Franchisor's pursuit of any remedies against the Franchisee or any other person; (2) Principal's liability will not be diminished, relieved, or otherwise affected by the Franchisee's insolvency, bankruptcy, or reorganization; the invalidity, illegality, or unenforceability of all or any part of the Agreement; or the amendment or extension of the Agreement with or without notice to the Principal; (3) Principal's liability shall not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which Franchisor 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 Principal's Undertaking, which shall be continuing and irrevocable during the term of the Agreement; and (4) this Principal's Undertaking shall apply in all modifications to the Agreement of any nature agreed to by Franchisee with or without the Principal receiving notice thereof. Principal waives: (1) notice of demand for payment of any indebtedness or on performance of any obligations hereby guaranteed; (2) protest and notice of default to any party respecting the indebtedness or nonperformance of any obligations hereby guaranteed; (3) any right he/she may have to require that an action be brought against the Franchisee or any other person as a condition of liability; (4) the defense of the statute of limitations in any action hereunder or for the collection of any indebtedness or the performance of any obligation hereby guaranteed; and (5) notice of any changes permitted by the terms of the Agreement or agreed to by the Franchisee.
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- The obligations of Principal are independent of the obligations of Franchisee, and a separate action or actions may be brought and prosecuted against Principal, whether or not actions are brought against Franchisee or whether or not Franchisee is joined in any such action.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a Principal's liability under the Principal's Undertaking is not diminished, relieved, or otherwise affected by the amendment or extension of the Belocal Agreement, with or without notice to the Principal. This means that even if the agreement between Belocal and the franchisee is modified or extended, the Principal remains fully liable under the terms of the Principal's Undertaking.
This provision protects Belocal by ensuring that the Principal's guarantee remains in effect regardless of any changes made to the franchise agreement. The Principal consents to these potential changes, acknowledging that their obligations continue even if the agreement is altered. This includes modifications of any nature agreed to by the franchisee, whether or not the Principal receives notice of these changes.
Furthermore, the Principal's Undertaking remains continuing and irrevocable during the term of the Belocal Agreement. The Principal also waives any right to require Belocal to first pursue action against the franchisee before seeking recourse from the Principal. This ensures that Belocal can directly pursue the Principal for any obligations without needing to exhaust remedies against the franchisee first. The obligations of the Principal are independent of the obligations of the Franchisee, and a separate action or actions may be brought and prosecuted against Principal, whether or not actions are brought against Franchisee or whether or not Franchisee is joined in any such action.