Who is considered an 'Obligor' under the Best Brains Promissory Note?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Each person liable on this Note in any capacity, whether as maker, endorser, surety, guarantor or otherwise, and any holder (collectively hereafter "Obligor"), waives the benefit of the homestead exemption and of all other exemptions available to him and also waives presentment, demand, protest, notice of dishonor and all other notices of every kind and nature to which he would otherwise be entitled under the applicable law. Each Obligor agrees that Holder may take any one or more of the following actions, on one or more occasions, whether before or after the maturity of this Note, without any notice to such Obligor, without any further consent to such actions, and without releasing or discharging such Obligor from liability on the Note: (a) any extension or extensions of the time of payment of any principal, interest or other amount due and payable under this Note; (b) any renewal of this Note, in whole or in part; (c) any full or partial release or discharge from liability under this Note of any other Obligor; (d) any waiver of any default under this Note or other agreement between the Lender and any Obligor relating to the indebtedness evidenced by this Note; or (e) any agreement with the Maker changing the rate of interest or any other term or condition of this Note.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, an 'Obligor' under the Promissory Note encompasses each person liable on the note in any capacity. This includes roles such as the maker, endorser, surety, or guarantor. The term 'Obligor' collectively refers to all these parties.
This definition is important because each Obligor waives certain rights and protections. Specifically, they waive the benefit of the homestead exemption and all other exemptions available to them. They also waive presentment, demand, protest, notice of dishonor, and all other notices they would otherwise be entitled to under applicable law. This means that Best Brains, as the note holder, has significant leeway in enforcing the note without needing to provide extensive notices or follow certain legal procedures that would normally protect the Obligor.
Furthermore, each Obligor agrees that Best Brains can take various actions without notice or consent, and without releasing the Obligor from liability. These actions include extending payment times, renewing the note, releasing other Obligors, waiving defaults, or changing the interest rate or other terms of the note. This clause provides Best Brains with considerable flexibility in managing the note and dealing with potential defaults.
For a prospective Best Brains franchisee, understanding the implications of being an Obligor is crucial. If you sign a Promissory Note in any of the capacities mentioned (maker, endorser, surety, or guarantor), you are giving up certain legal rights and protections. You are also agreeing to be bound by any modifications Best Brains makes to the note, even without your direct consent. Therefore, it is essential to carefully review the terms of the Promissory Note and seek legal counsel to fully understand the risks and obligations involved.