Under the Bevaris Alliance agreement, is the Individual's liability joint, several, or both?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
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, the individual's liability under the guarantee clause is joint and several. This is detailed in clause 22.3 of the franchise agreement. This means that the franchisor, Bevaris Alliance, can pursue the individual guarantor for the full amount of the franchisee's obligations, regardless of whether the franchisor also pursues the franchisee.
In practical terms, this clause places a significant financial responsibility on the individual signing the guarantee. If the franchisee fails to meet its financial or operational obligations, Bevaris Alliance can seek recourse directly from the individual's personal assets. This is a standard practice in franchising, as it provides the franchisor with an additional layer of security.
Prospective franchisees should carefully consider the implications of a joint and several liability clause. It is advisable to seek legal counsel to fully understand the extent of the personal financial risk involved before signing the franchise agreement. Franchisees should also evaluate their business plan and financial projections to ensure they can meet their obligations under the franchise agreement, thereby minimizing the risk of triggering the individual guarantee.