Under the Buildingstars Guarantee, is the Guarantor's liability joint and several?
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's 2025 Franchise Disclosure Document, the Guarantor's liability under the Guarantee and Assumption of Obligations is joint and several. This means that each guarantor is individually and collectively liable for the full amount of the franchisee's obligations to Buildingstars. Buildingstars can pursue any one guarantor for the entire debt, regardless of the involvement or financial status of the other guarantors or the franchisee.
This arrangement benefits Buildingstars by providing multiple avenues for recovering debts or enforcing obligations. However, it poses a significant risk to the guarantors. If one guarantor has deeper pockets or is more easily accessible, Buildingstars might target that individual for the full amount owed, even if other guarantors exist.
Furthermore, the guarantor's liability is not contingent upon Buildingstars first pursuing remedies against the franchisee or any other person. Buildingstars can demand immediate payment or performance from the guarantor if the franchisee fails to fulfill their obligations. The guarantor's obligations remain even if Buildingstars grants extensions of time or credit to the franchisee.
Prospective Buildingstars franchisees should carefully consider the implications of this joint and several liability before signing the Guarantee and Assumption of Obligations. They should seek legal counsel to fully understand their rights and responsibilities and to assess the potential risks involved in providing such a guarantee.