Does the Guaranty and Assumption of Obligations under Sublease establish joint and several liability for Browns Chicken franchisees?

According to Browns Chicken's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations includes a clause specifying joint and several liability. Specifically, the guarantor's liability under the guaranty is direct, immediate, joint, and several. This means that each person signing the guaranty is individually and collectively responsible for the full amount of the franchisee's obligations. Browns Chicken can pursue any one guarantor for the entire debt, regardless of the contributions of other guarantors.

This arrangement benefits Browns Chicken by providing multiple avenues for recovering debts or enforcing obligations. However, it poses a significant risk to the individuals signing the guaranty. If one guarantor is unable to pay, the other guarantors become responsible for the unpaid portion. This can create substantial financial risk for the guarantors, especially if they have limited control over the franchisee's business operations.

For a prospective Browns Chicken franchisee, understanding the implications of joint and several liability is crucial. Before signing the Guaranty and Assumption of Obligations, potential guarantors should carefully assess the financial stability and business acumen of the franchisee. It is advisable to seek legal counsel to fully understand the risks and potential liabilities involved. Guarantors may also want to discuss with the other guarantors how the liability will be shared among them.