Under the Bevaris Alliance agreement, what does the guarantor guarantee regarding payments by the franchisee?
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 guarantor provides several guarantees to the franchisor. The guarantor ensures the franchisee's full and prompt performance of all obligations under the franchise agreement and any related Food Service Agreements. This means the guarantor is on the hook if the franchisee fails to meet any requirements outlined in those agreements.
Specifically, the guarantor guarantees the punctual payment of all sums the franchisee owes under the agreement or due to any breaches of the agreement's provisions. The guarantor also commits to immediately fulfilling all of the franchisee's obligations if the franchisee fails to do so. This includes paying any outstanding amounts or performing any required actions.
Furthermore, the guarantor is obligated to unconditionally pay the franchisor any amount necessary to cover losses, damages, costs, and expenses resulting from the franchisee's failure to meet their obligations or pay sums when due. This also applies if the guarantor fails to comply with their own obligations to ensure the franchisee's performance. It is important to note that Bevaris Alliance does not need to first demand payment from or take action against the franchisee before making a demand on the guarantor.
The guarantor's liability is joint and several, meaning they are individually and collectively responsible. This liability is not reduced or affected by any unenforceability, invalidity, or other issues related to the franchisee's obligations or any limitations related to the franchisee or other parties. This clause ensures that Bevaris Alliance has a direct and reliable recourse for financial and performance obligations, regardless of the franchisee's circumstances.