What is the purpose of the 'Guaranty' included as Exhibit 8 in the Bor Restoration FDD?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
e Franchise Disclosure Supplemental Agreements are amended accordingly.
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EXHIBIT 8 GUARANTY
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GUARANTY OF FRANCHISEE'S OBLIGATIONS
| This Guaranty of Franchisee's Obligations (Guaranty) is entered into as of the date that it is signed by all Parties (Effective Date) of this Guaranty, between BOR Franchising, LLC (Franchisor), (Franchisee) and , and (jointly and severally known as "Guarantor(s)"). Franchisor, Franchisee, and Guarantors may be referred to as a "Party" or as the "Parties." Any capitalized term not defined here will have the meaning given to it in the Franchise Agreement. |
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| RECITALS |
| Franchisee signed a franchise agreement with Franchisor on the day of, 20 |
| (Franchise Agreement). |
| As an inducement to the Franchisor for granting the |
| franchise rights, the |
| Guarantor(s) agreed to fully guaranty the payment and performance of Franchisee under the Franchise |
| Agreement; |
| NOW, THEREFORE, for and in consideration of the mutual covenants found herein and for other |
| good and valuable consideration, which consideration is deemed to be adequate by all Parties, each of the |
| undersigned personally and unconditionally agrees |
| to the following: |
| COVENANTS |
| 1. |
| Guarantor(s) guarantee to Franchisor and its successors and assigns, for the Term of the |
| Franchise Agreement, that Franchisee will |
| timely pay any amount required by the Franchise Agreement |
| and will perform every undertaking, agreement, and covenant under the Franchise Agreement and any |
| addenda or Exhibits attached to it |
| as each may be amended or renewed. |
| 2. |
| Guarantor(s) also agrees to be personally bound by every term of the Franchise |
| Agreement, as amended or renewed, |
| and agrees to be personally liable for the breach of and cure of every |
| breach of any term, covenant, or condition of the Franchise Agreement. |
| Guarantor(s) agree that this |
| Guaranty is one of payment and performance and not one of just collection. |
| 3. |
| By signing this Guaranty, each Guarantor further agrees that each shall also be subject to |
| all restrictive covenants in the Franchise Agreement, including |
| all covenants of Articles |
| 6, 14, 15, |
| and 16. |
| 4. |
| As part of the inducement given to Franchisor by Guarantor(s), |
| the Guarantor(s) further |
| agree to waive the following, |
| a. |
| acceptance or notice of acceptance; |
| b. |
| notice of demand for payment of any indebtedness or notice of any |
| nonperformance of any obligations; |
| c. |
| protest and notice of default concerning |
| the indebtedness or nonperformance of |
| any obligations guaranteed; |
| d. |
| any right Guarantor may have to require that any action be first brought against |
| Franchisee or any other Person |
| as a condition of liability; and |
| © 2024 All rights reserved BOR Franchising, LLC Gen 3-30-24 |
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| Initials |
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- e. all other notices and legal or equitable defenses to which Guarantor may be entitled.
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- Guarantor(s) further consent and agrees that:
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- a. Guarantor(s) is directly and immediately liable under this Guaranty, and if signed by more than one Person, such liability is joint and several;
- b. Guarantor(s) shall render any payment or performance required under the Franchise Agreement upon demand of Franchisor if Franchisee fails or refuses punctually to do so;
- c. Guarantor(s) performance shall not be contingent or conditioned upon the pursuit of any remedies against Franchisee or any other Person;
- d. Guarantor(s) liability shall not be diminished, relieved, or otherwise affected by an extension of time, credit, or another indulgence, including the acceptance of any partial payment or performance, or the compromise or release of any claims which Franchisor may from time to time grant to Franchisee or any other Person, none of which shall in any way modify or amend this Guaranty, which shall be continuing and irrevocable during the Term of the Franchise Agreement, including renewals thereof;
- e. this Guaranty will be continuing and irrevocable during the Term of the Franchise Agreement, including renewals thereof; and,
- f. Franchisor's rights under this Guaranty will not be exhausted by any action of Franchisor until all of the terms, covenants, and conditions of the Franchise Agreement have been met.
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- Guarantor waives all of the following, whether created or imposed by or under statute, common law or otherwise:
- a. any right to require Franchisor to proceed against Franchisee or any other Person or any security now or hereafter held by Franchisor or to pursue any other remedy whatsoever;
- b. any defense based upon any legal disability of Franchisee or any Guarantor, or any discharge or limitation of the liability of Franchisee or any Guarantor to Franchisor, or any restraint or stay applicable to actions against Franchisee or any other Guarantor, whether such disability, discharge, limitation, restraint or stay is consensual, or by order of a court or other governmental authority, or arising by operation of law or any liquidation, reorganization, receivership, bankruptcy, insolvency or debtor-relief proceeding, or from any other cause;
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, Exhibit 8 is a Guaranty agreement. This agreement is put in place as an inducement to Bor Restoration for granting franchise rights. Under the Guaranty, the Guarantor(s) agree to guarantee the franchisee's payment obligations and performance under the Franchise Agreement for the term of the agreement, including any amendments or renewals.
The Guarantor(s) also agree to be personally bound by every term of the Franchise Agreement and liable for any breaches. This Guaranty is one of payment and performance, not just collection, meaning Bor Restoration can seek payment directly from the guarantor without first pursuing the franchisee. The Guarantor(s) also agree to be subject to all restrictive covenants in the Franchise Agreement, including those related to confidentiality, non-competition, and non-solicitation.
The Guarantor(s) waive certain rights, including the right to require Bor Restoration to first proceed against the franchisee, and any defenses based on the franchisee's financial condition or the guarantor's lack of knowledge thereof. The Guarantor(s) also consent to being directly and immediately liable under the Guaranty, with liability being joint and several if there is more than one guarantor. The Guaranty is continuing and irrevocable during the term of the Franchise Agreement, including renewals. If the franchisee is not a natural person, all equity owners must sign the Guaranty.