Under what circumstances will the Principal's liability under the Belocal Principal's Undertaking be diminished or relieved?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the Principal's liability under the Principal's Undertaking is designed to be robust and is not easily diminished or relieved. The Principal acts as a surety and guarantor for the Franchisee's financial obligations under the Franchise Agreement, meaning they are jointly, individually, and severally liable for all amounts owed by the Franchisee, including any indemnities. This liability is direct, immediate, and independent of the Franchisee's own liability.
The Principal's obligations remain even if the Franchisee becomes insolvent, bankrupt, or undergoes reorganization. The liability is also unaffected by the invalidity, illegality, or unenforceability of any part of the Franchise Agreement. Furthermore, any amendments or extensions to the Franchise Agreement, even without notice to the Principal, do not diminish or relieve the Principal's liability.
Belocal can pursue action against the Principal without first pursuing action against the Franchisee. The Principal also consents to the fact that their liability will not be contingent upon Belocal pursuing any remedies against the Franchisee. The Principal's obligations are independent of the Franchisee's, and a separate action can be brought against the Principal, regardless of whether actions are taken against the Franchisee. The Principal also agrees to pay all reasonable attorney's fees and costs associated with collecting amounts due under the undertaking or enforcing it against the Principal.