Under the Bevaris Alliance agreement, what does the Individual guarantee regarding the Franchisee's performance?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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 provides several guarantees regarding the Franchisee's performance. Specifically, the Individual guarantees the full, prompt, and complete performance of all the Franchisee's obligations under the franchise agreement and any related Food Service Agreements. This means the Individual is on the hook if the Franchisee fails to meet its contractual duties.
Furthermore, the Individual guarantees the punctual payment of all sums payable by the Franchisee under the agreement or due to any breach of the agreement's provisions. This part of the guarantee ensures that all financial obligations of the Franchisee are met, and the Individual will cover any shortfalls. The Individual also undertakes to immediately perform or procure the performance of all the Franchisee's obligations and to pay the Franchisor, immediately on demand and unconditionally, any sum required to cover losses, damages, costs, and expenses arising from the Franchisee's failure to perform their obligations or pay sums due.
These guarantees are separate and independent obligations of the Individual, meaning Bevaris Alliance can pursue the Individual directly without first having to make a demand on, take proceedings against, or enforce any security against the Franchisee. The Individual's liability is joint and several and won't be reduced or discharged by any unenforceability, invalidity, or other issues affecting the Franchisee's obligations. This guarantee remains in effect until all of the Franchisee's obligations under the agreement have been fully performed and paid.
In addition to the financial guarantees, the Individual must assure that the Franchisee performs all its obligations, devote full-time attention and effort to the Franchisee's business, be a director, officer, or managing member of the Franchisee, and hold more than 50% of the issued voting capital of the Franchisee. This ensures the Individual is actively involved in managing the Franchisee's business and has a vested interest in its success. The Individual cannot assign or transfer any of their rights or obligations under the agreement.