What is the definition of 'Obligor' in the context of 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" in the context of the promissory note refers to each person liable on the note in any capacity. This includes individuals acting as the maker, endorser, surety, or guarantor. The term "Obligor" also encompasses any holder of the note.
This definition is important because it clarifies who is bound by the terms of the promissory note and who is responsible for fulfilling its obligations. By signing the promissory note, each Obligor agrees to waive certain rights, such as the benefit of the homestead exemption and other exemptions, as well as presentment, demand, protest, and notice of dishonor. This means that Best Brains, as the Holder, has certain advantages in enforcing the note against any Obligor.
Furthermore, each Obligor agrees that Best Brains can take various actions without notice or consent, such as extending payment timelines, renewing the note, releasing other Obligors, waiving defaults, or changing the interest rate or other terms. These actions can be taken without releasing or discharging any Obligor from their liability on the note. This provides Best Brains with significant flexibility in managing the promissory note and addressing potential issues that may arise.
Prospective franchisees should carefully consider the implications of becoming an Obligor on a Best Brains promissory note. It is advisable to seek legal counsel to fully understand the rights and obligations associated with this role, especially concerning the waivers and the broad range of actions that Best Brains can take without the Obligor's consent.