Under the Big Apple Bagels Guaranty, is the Guarantor's liability joint and several?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (1) his direct and immediate liability under this guaranty shall be joint and several; (2) he shall render any payment or performance required under the Agreement upon demand if Developer fails or refuses punctually to do so; (3) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Developer or any other person; and (4) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Franchisor may from time to time grant to Developer or to any other person, including without limitation the acceptance
of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend his guaranty, which shall be continuing and irrevocable during the term of the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the guarantor's liability is joint and several. This means that each person signing the guaranty is individually responsible for the full amount of the developer's obligations. Big Apple Bagels can pursue any one guarantor for the entire debt, regardless of whether other guarantors exist or what their individual contributions might be.
This arrangement benefits Big Apple Bagels by providing them with multiple avenues for recovering any losses. They are not required to pursue all guarantors simultaneously or proportionally. This can expedite the recovery process and reduce the risk of non-payment.
For potential Big Apple Bagels franchisees, this clause highlights the importance of fully understanding the implications of signing a guaranty. If multiple individuals are acting as guarantors, each should be aware that they could be held responsible for the entire debt, even if the agreement attempts to allocate responsibility differently among themselves. Franchisees should seek legal counsel to fully understand their obligations and potential liabilities under the guaranty.