Can an amendment to the Bombs Away Franchise Agreement diminish the Guarantor's liability?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- **4.
Modification.** Guarantor agrees that Guarantor's liability hereunder shall not be diminished, relieved or otherwise affected by (a) any amendment of the Franchise Agreement, (b) any extension of time, credit or other indulgence which Bombs Away Franchising may from timeto-time grant to Franchisee or to any other person or entity, or (c) the acceptance of any partial payment or performance or the compromise or release of any claims.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the Guarantor's liability will not be diminished by any amendment to the Franchise Agreement. The Guaranty and Non-Compete Agreement specifies that the Guarantor's obligations are not affected if Bombs Away Franchising grants the franchisee an extension of time or credit, or accepts partial payments. This ensures that the guarantor remains fully responsible for the franchisee's obligations, even if the original terms of the agreement are altered.
This provision protects Bombs Away by ensuring that the guarantor's commitment remains intact throughout the term of the agreement, regardless of any modifications made between Bombs Away and the franchisee. It also means that the guarantor cannot claim that their obligations are reduced or eliminated due to changes in the Franchise Agreement. The guarantor remains liable for the franchisee's performance and financial obligations as initially agreed.
For a prospective Bombs Away franchisee, this clause highlights the importance of fully understanding the scope of the Guaranty and Non-Compete Agreement. Individuals considering acting as a guarantor should be aware that their liability is comprehensive and will not be reduced by subsequent amendments or concessions made to the franchisee. They should carefully assess the franchisee's financial stability and business plan before agreeing to guarantee their obligations under the Franchise Agreement.