What acceptance and notice is the Guarantor waiving under the Better Blend Guaranty?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Guarantor waives (a) acceptance and notice of acceptance by BBF of this Guaranty; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations of Franchisee; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right Guarantor may have to require that an action be brought against Franchisee or any other person or entity as a condition of liability hereunder; (e) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the execution of and performance under this Guaranty by the undersigned; (f) any law which requires that BBF make demand upon, assert claims against or collect from Franchisee or any other person or entity (including any other guarantor), foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Franchisee or any other person or entity (including any other guarantor) prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guaranty; and (g) any and all other notices and legal or equitable defenses to which Guarantor may be entitled.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the Guarantor is waiving several rights related to the Guaranty. Specifically, the Guarantor waives acceptance and notice of acceptance by Better Blend of the Guaranty. This means Better Blend doesn't have to formally notify the Guarantor that they accept the Guaranty for it to be effective.
The Guarantor also waives notice of demand for payment of any debt or nonperformance of any obligations by the franchisee. This means Better Blend doesn't have to inform the Guarantor that the franchisee hasn't paid or performed as required. Additionally, the Guarantor waives protest and notice of default related to the guaranteed obligations. This means the Guarantor won't receive a formal protest or notification if the franchisee defaults.
Furthermore, the Guarantor waives any right to require Better Blend to first sue or take action against the franchisee before pursuing the Guarantor. The Guarantor also relinquishes all rights to payments, claims for reimbursement, or subrogation against the franchisee that might arise from the Guarantor's obligations under the Guaranty. Finally, the Guarantor waives any legal rights or defenses they might otherwise have.
In practical terms, these waivers significantly strengthen Better Blend's position by allowing them to pursue the Guarantor directly and immediately if the franchisee defaults, without having to exhaust other remedies or provide specific notices. This arrangement is common in franchising, as it provides the franchisor with added security, but it places a substantial burden and risk on the Guarantor.