Is the Browns Chicken guaranty continuing and irrevocable during the term of the agreement?
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 guaranty provided by the franchisee is designed to ensure the franchisee meets all obligations outlined in the franchise agreement. Specifically, the guarantor personally and unconditionally guarantees that the franchisee will punctually pay and perform every undertaking, agreement, and covenant detailed in the agreement for the term of the agreement.
This guaranty extends to all monetary obligations and requirements to take or refrain from specific actions, including adherence to Sections 15, 17, and 21 of the franchise agreement. This means the guarantor is personally liable if the Browns Chicken franchisee fails to meet financial responsibilities or violates any operational or competitive restrictions outlined in those sections.
In practical terms, this clause means that if a Browns Chicken franchisee defaults on payments or breaches the franchise agreement, Browns Chicken can pursue the guarantor directly for the franchisee's obligations. The guaranty remains in effect for the entire term of the franchise agreement and continues thereafter as provided in the agreement, indicating that certain obligations may extend beyond the agreement's expiration. This provides Browns Chicken with an additional layer of financial security and assurance that the franchisee will comply with all terms and conditions.