Under the Bevaris Alliance franchise agreement, what is the Individual guaranteeing as a primary obligor?
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
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the Individual signing the agreement, as a primary obligor, guarantees specific obligations of the Franchisee to Bevaris Alliance. This guarantee is made in consideration of Bevaris Alliance entering into the franchise agreement with the Franchisee.
Specifically, the Individual guarantees the full, prompt, and complete performance by the Franchisee of all obligations under the franchise agreement and any Food Service Agreements. This includes guaranteeing the punctual payment of all sums payable by the Franchisee under the agreement or resulting from any breach of the agreement's provisions. The Individual also undertakes to perform or ensure the performance of all the Franchisee's obligations and to pay Bevaris Alliance immediately upon demand any sum necessary to cover all losses, damages, costs, and expenses arising from the Franchisee's failure to fulfill their obligations or pay sums due.
Before demanding fulfillment from the Individual, Bevaris Alliance is not required to first make a demand on, take proceedings against, or enforce any security against the Franchisee or any other person. The Individual's liability is joint and several and will not be reduced or affected by any unenforceability, invalidity, or other issues related to 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.
This type of guarantee is common in franchising, especially when the franchisee is a corporate entity. It ensures that there is a responsible individual who is personally liable for the franchisee's performance, providing additional security to Bevaris Alliance. Prospective franchisees should carefully consider the implications of this guarantee and ensure they understand the full extent of their obligations.