Under the Brain Balance guarantee, is the guarantor's liability joint and several?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Guarantor consents and agrees that:
- (1) his or her direct and immediate liability under this guaranty shall be joint and several;
- (2) he or she shall render any payment or performance required under the Agreement upon demand if FRANCHISEE fails or refuses to do so punctually;
- (3) such liability shall not be contingent or conditioned upon pursuit by FRANCHISOR of any remedies against FRANCHISEE or any other person;
- (4) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which FRANCHISOR may, from time to time, grant to FRANCHISEE or to any other person, including without limitation the acceptance of any partial
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the guarantor's liability is joint and several. This means that each guarantor is individually and collectively responsible for the full amount of the liability. Brain Balance can pursue any one guarantor for the entire debt, regardless of whether other guarantors exist or their ability to pay.
This arrangement benefits Brain Balance by providing them with multiple avenues for recovering any losses. It also simplifies the collection process, as they do not need to pursue all guarantors simultaneously or proportionally.
For potential Brain Balance franchisees, this implies that if a personal guarantee is required, each guarantor should fully understand the extent of their potential liability. It is crucial to assess the financial stability of any co-guarantors, as their potential default could shift the entire burden onto the remaining guarantors. Franchisees should seek legal counsel to fully understand the implications of a joint and several guarantee before signing any agreements.
Furthermore, the guarantor consents to several conditions that limit their defenses and rights, including waiving notices, demands for payment, and any requirement that Brain Balance first pursue the franchisee. The guarantor's liability remains even if Brain Balance grants extensions or compromises with the franchisee, highlighting the comprehensive nature of the guarantee.