Can the Buildingstars Guarantor's liability be diminished by any extension of time or credit granted to the Franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned 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 the FRANCHISEE fails or refuses punctually to do so;
- (3) such liability shall not be contingent upon or conditioned upon pursuit by BUILDINGSTARS or Affiliates of any remedies against the FRANCHISEE or any other person; and
- (4) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or the indulgence which BUILDINGSTARS or Affiliates may from time to time grant to the
FRANCHISEE or to any other person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable during the term of the Agreement.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the liability of the guarantor is not diminished, relieved, or otherwise affected by any extension of time or credit that Buildingstars may grant to the franchisee. This also applies to any other person involved. This includes accepting partial payments, performance, or the compromise or release of any claims. The document specifies that none of these actions will modify or amend the guaranty, which remains continuous and irrevocable during the term of the agreement.
This provision protects Buildingstars by ensuring that the guarantor remains fully liable for the franchisee's obligations, even if Buildingstars provides some leniency or flexibility to the franchisee. It means that if the franchisee fails to meet their financial obligations, Buildingstars can pursue the guarantor for the full amount owed, regardless of any payment plans or other arrangements made with the franchisee.
For a prospective Buildingstars franchisee, this clause highlights the significant responsibility assumed by the guarantor. Before signing the guarantee, potential guarantors should carefully consider the franchisee's financial stability and ability to meet their obligations under the franchise agreement. They should also understand that their liability is not reduced even if Buildingstars offers the franchisee some flexibility in payment terms. This clause is fairly standard in franchise agreements, as franchisors seek to ensure financial security and recourse in case of franchisee default.