What is the guarantor agreeing to be personally bound by in the Browns Chicken Guaranty and Assumption of Obligations?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS is given this day of , 20, by |
|---|
| of |
| 1. |
| In consideration of, and to induce BROWN'S CHICKEN, LLC (the "Company") to enter |
| into a franchise agreement dated, 20 (the "Franchise Agreement"), with |
| ("Franchisee"), each of the undersigned hereby |
| personally and unconditionally (a) guarantees to the Company, and its successors and assigns, |
| for the term of the Agreement and thereafter as provided in the Agreement, that the Franchisee |
| shall punctually pay and perform each and every undertaking, agreement and covenant set forth |
| in the Agreement; and (b) agrees to be personally bound by, and personally liable for the breach |
| of, each and every provision in the Agreement, both monetary obligations and obligations to take |
| or refrain from taking specific actions or to engage or refrain from engaging in specific activities, |
| including without limitation the provisions of Sections 15, 17, and 21 (all of which shall be |
| referred to as the "Obligations"). |
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the guarantor is agreeing to be personally bound by the franchise agreement. Specifically, the guarantor is guaranteeing that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement for the term of the agreement and beyond, as specified in the agreement.
This means the guarantor is not only ensuring the franchisee meets all monetary obligations, but also all obligations to take or refrain from specific actions. This includes, but is not limited to, the provisions outlined in Sections 15, 17, and 21 of the agreement, which are collectively referred to as the "Obligations".
For a prospective Browns Chicken franchisee, this implies that if they require a guarantor to secure the franchise agreement, that guarantor is taking on significant personal liability. The guarantor's personal assets could be at risk if the franchisee fails to meet their obligations under the agreement. It is crucial for both the franchisee and the guarantor to fully understand the terms of the Franchise Agreement and the implications of the Guaranty and Assumption of Obligations before signing.