Does the guarantor for a Benihana franchise consent to modifications of the terms and conditions of performance of the obligations?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
and the prompt performance of each and every covenant, agreement, and condition set forth in any of the BENIHANA Agreements.
3. Waivers by GUARANTOR. GUARANTOR hereby waives:
- (a) acceptance and notice of acceptance by FRANCHISOR of the foregoing Guaranty;
- (b) notice of demand for payment of FRANCHISEE's indebtedness or nonperformance of any of the Obligations;
- (c) presentment or protest of any instrument and notice thereof or any notice of default or intent to accelerate with respect to the indebtedness or nonperformance of any of the Obligations;
- (d) any right GUARANTOR may have to require that an action be brought against FRANCHISEE or any other person as a condition of GUARANTOR's liability;
- (e) the defense of the statute of limitations in any action for the enforcement, performance, or collection of any Obligation;
- (f) any and all rights to payments, indemnities, and claims for reimbursement or subrogation that GUARANTOR may have against FRANCHISEE arising from GUARANTOR'S execution of and performance under this Guaranty;
- (g) any defense based on any irregularity or defect in the creation of any of the Obligations or modification of the terms and conditions of performance thereof;
- (h) any defense based on the failure of FRANCHISOR or any other party to take, protect, perfect, or preserve any right against and/or security granted by the FRANCHISEE or any other party;
- (i) any and all other notices and legal or equitable defenses to which GUARANTOR may be entitled.
4.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the guarantor consents to modifications of the terms and conditions of performance of the obligations. The guarantor for a Benihana franchise explicitly waives any defense based on irregularities or defects in the creation of any obligations or modifications of the terms and conditions of performance. This waiver is part of a broader set of waivers that the guarantor makes, including waiving notice of acceptance of the guaranty, notice of demand for payment, and any right to require action against the franchisee before pursuing the guarantor.
Furthermore, the guarantor's obligations remain in effect even if there are extensions, modifications, or amendments to the Franchise Agreement or any other Benihana Agreements. The guarantor waives any notice of such changes. The guarantor's liability is not affected by extensions of time, credit, or waivers granted to the franchisee. This includes acceptance of partial payments, compromises, or releases of claims.
This aspect of the guaranty agreement is designed to protect Benihana by ensuring that the guarantor remains liable for the franchisee's obligations, even if the terms of those obligations change over time. Prospective franchisees should ensure that any individual acting as a guarantor fully understands the scope of this continuing liability, as it extends to any modifications or amendments to the franchise agreement. This is a standard practice in franchising, as it provides the franchisor with added financial security.