In the Bevaris Alliance agreement, what is the Individual's status as an obligor?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
22. Individual's guarantee and covenants
- 22.1 In consideration of the Franchisor entering into this agreement with the Franchisee, the Individual, as primary obligor, irrevocably and unconditionally as separate and independent obligations:
- (a) guarantees the full, prompt and complete performance by the Franchisee of each of its obligations under this agreement and the Food Service Agreements;
(b) guarantees the punctual payment of all sums payable by the Franchisee under this agreement or in consequence of any breach of the provisions of this agreement;
(c) undertakes, immediately on demand, to perform or procure the performance of all the Franchisee's obligations referred to in clause 22.1(a) and clause 22.1(b); and
(d) undertakes to pay to the Franchisor, immediately on demand and unconditionally, such sum to make good all losses, damage, costs and expenses arising out of the Franchisee's failure to perform such obligations, or pay such sums on the due date, or the Individual's failure to comply with the provisions of clause 22.1(a), clause 22.1(b) and clause 22.1(c).
22.2 Before making a demand under clause 22.1, it shall not be necessary for the Franchisor to have made a demand on, taken out proceedings against, or taken any action to enforce any security against the Franchisee or any other person.
22.3 The Individual's liability under this clause 22 shall be joint and several and shall not be reduced, discharged or adversely affected in any way, by:
(a) any unenforceability, invalidity, irregularity, frustration or discharge by operation of law of any of the Franchisee's obligations under this agreement; or
(b) any legal limitation, disability, incapacity or other circumstances relating to the Franchisee or any other person; or
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, an Individual who is party to the franchise agreement acts as a primary obligor, guaranteeing the franchisee's performance and payments. Specifically, in consideration of Bevaris Alliance entering into the agreement with the franchisee, the Individual guarantees the franchisee's obligations under the agreement and any related Food Service Agreements. This includes guaranteeing the punctual payment of all sums payable by the franchisee.
In practical terms, this means the Individual is personally responsible for ensuring the franchisee meets all financial and operational obligations outlined in the franchise agreement. If the franchisee fails to perform their duties or make required payments, Bevaris Alliance can demand that the Individual fulfill those obligations directly. This guarantee is separate and independent, meaning Bevaris Alliance does not need to first pursue action against the franchisee before seeking recourse from the Individual.
The Individual also undertakes to cover any losses, damages, costs, and expenses arising from the franchisee's failure to meet their obligations. The Individual's liability is joint and several, meaning they can be held fully liable regardless of the franchisee's circumstances. This guarantee remains in effect even if the franchisee's obligations become unenforceable or are affected by legal limitations or other circumstances.
This arrangement is a significant commitment for the Individual, as it places their personal assets at risk should the franchisee default on their obligations. Prospective franchisees should carefully consider the implications of this guarantee and seek legal counsel to fully understand their responsibilities and potential liabilities.