What is the extent of the Principal's liability as a surety and guarantor for the Franchisee's payments under the Belocal Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Principal agrees to jointly, individually, and severally become a surety and guarantor for the payment of all amounts Franchisee must pay under the terms of the Agreement, including under any indemnity.
Principal's liability under this undertaking shall be direct, immediate, and independent of the liability of, and shall be joint and several with, Franchisee and the other guarantors of Franchisee.
Principal shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so.
Franchisor may proceed against Principal and Franchisee jointly and severally, or Franchisor may, at its option, proceed against Principal, without having commenced any action or obtained any judgment against Franchisee.
Principal agrees to pay all reasonable attorneys' fees and all costs and other expenses incurred in any collection or attempt to collect amounts due pursuant to this undertaking or any negotiations relative to the obligations hereby guaranteed or in enforcing this undertaking against Principal.
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
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a Principal who signs the agreement acts as a surety and guarantor for the franchisee's financial obligations. This means the Principal is jointly, individually, and severally liable for all amounts the franchisee owes under the Belocal Agreement, including any indemnity obligations. This liability is direct, immediate, and independent of the franchisee's own liability. Belocal can pursue the Principal directly, even without taking action against the franchisee first.
The Principal must make any payment or fulfill any obligation required by the agreement if the franchisee fails to do so promptly. The Principal also agrees to cover all reasonable attorneys' fees, costs, and other expenses Belocal incurs while trying to collect amounts due or enforcing the guarantee.
The Principal's liability is not contingent on Belocal pursuing remedies against the franchisee or any other person. It also remains unaffected by the franchisee's insolvency, bankruptcy, or the invalidity of any part of the agreement. Furthermore, the Principal's liability is not diminished by any extensions of time, credit, or other allowances Belocal might grant to the franchisee. The Principal also waives certain rights, including the right to demand that Belocal first bring an action against the franchisee before pursuing the Principal.