What is the purpose of the 'Signature' lines for the Guarantors in the Bor Restoration FDD?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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. |
|---|
| 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 |
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the signature lines for the Guarantors are part of a Guaranty of Franchisee's Obligations. This Guaranty is a legally binding agreement entered into by BOR Franchising, LLC (the Franchisor), the Franchisee, and the Guarantors. The Guarantors agree to fully guarantee the payment and performance of the Franchisee under the Franchise Agreement as an inducement for the Franchisor granting franchise rights. This ensures that if the franchisee fails to meet their financial or operational obligations, the guarantors are legally bound to fulfill those obligations.
The Guaranty outlines specific covenants, including the Guarantors' commitment to ensure the Franchisee timely pays any amount required by the Franchise Agreement and performs every undertaking, agreement, and covenant within the Franchise Agreement. The Guarantors also agree to be personally bound by every term of the Franchise Agreement, as amended or renewed, and liable for any breach of the agreement. This includes adherence to restrictive covenants outlined in Articles 6, 14, 15, and 16 of the Franchise Agreement.
Furthermore, by signing the Guaranty, each Guarantor waives certain rights, such as the right to require that action be first brought against the Franchisee before holding the Guarantor liable. This waiver streamlines the process for Bor Restoration to seek recourse directly from the Guarantors in case of the Franchisee's default. The Guaranty serves as a critical protection for Bor Restoration, ensuring financial and operational stability by having additional parties liable for the Franchisee's obligations.