Does the Bombs Away Guaranty extend to liabilities and obligations of the Franchisee not contained in the Franchise Agreement?
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.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the Guaranty extends to liabilities and obligations of the franchisee, whether or not they are contained in the Franchise Agreement. The Guarantor unconditionally guarantees that the Franchisee will pay and perform every undertaking, agreement, and covenant set forth in the Franchise Agreement. The Guarantor further guarantees every other liability and obligation of the Franchisee to Bombs Away, regardless of whether it is included in the Franchise Agreement.
This means that the Guarantor's obligations are not limited to just the Franchise Agreement. The Guarantor must make any payment or performance required under the Franchise Agreement or any other agreement between the Franchisee and Bombs Away upon demand from Bombs Away.
This broad guarantee has significant implications for the Guarantor, as they are taking on responsibility for all of the Franchisee's financial and performance obligations to Bombs Away. A prospective franchisee should carefully consider the scope of this guarantee and the potential risks involved before signing the Guaranty and Non-Compete Agreement.