Does the Bombs Away Guaranty agreement specify any financial thresholds related to the guarantee?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Guarantor hereby unconditionally guarantees to Bombs Away Franchising and its successors and assigns that Franchisee shall pay and perform every undertaking, agreement and covenant set forth in the Franchise Agreement and further guarantees every other liability and obligation of Franchisee to Bombs Away Franchising, whether or not contained in the Franchise Agreement.
Guarantor shall render any payment or performance required under the Franchise Agreement or any other agreement between Franchisee and Bombs Away Franchising upon demand from Bombs Away Franchising.
Guarantor waives (a) acceptance and notice of acceptance by Bombs Away Franchising of this Guaranty; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations of Franchisee; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right Guarantor may have to require that an action be brought against Franchisee or any other person or entity as a condition of liability hereunder; (e) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the execution of and performance under this Guaranty by the undersigned; (f) any law which requires that Bombs Away Franchising make demand upon, assert claims against or collect from Franchisee or any other person or entity (including any other guarantor), foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Franchisee or any other person or entity (including any other guarantor) prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guaranty; and (g) any and all other notices and legal or equitable defenses to which Guarantor may be entitled.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the Guaranty Agreement does not specify any particular financial thresholds that trigger the guarantee. Instead, the guarantor unconditionally guarantees that the franchisee will fulfill every obligation, agreement, and covenant outlined in the Franchise Agreement, as well as any other liabilities the franchisee owes to Bombs Away Franchising.
This means that the guarantor's responsibility extends to all financial and performance obligations of the franchisee, regardless of the amount. Bombs Away Franchising can demand payment or performance from the guarantor at any time if the franchisee fails to meet their obligations. The guarantor also waives several rights, including the right to require Bombs Away Franchising to first pursue action against the franchisee before demanding payment or performance from the guarantor.
For a prospective Bombs Away franchisee, this implies that anyone acting as a guarantor (typically an owner or investor) must be fully aware of the comprehensive financial and operational commitments of the franchise. The guarantor's personal assets are at risk should the franchisee default on any aspect of the Franchise Agreement. It is advisable for potential guarantors to seek legal counsel to fully understand the implications of this agreement before signing.