Does the Bumper Man Guaranty allow for compromise or release of claims?
Bumper_Man Franchise · 2025 FDDAnswer from 2025 FDD Document
Principal consents and agrees that such liability will not be diminished, relieved or otherwise affected by any extension of time, credit or other concession that Franchisor may periodically grant to 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 will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the Term.
Principal waives all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the undersigned's execution of and performance under this Guaranty.
Source: Item 23 — RECEIPTS (FDD pages 45–180)
What This Means (2025 FDD)
According to the 2025 Bumper Man FDD, the liability of the Principal under the Guaranty will not be affected by any compromise or release of claims that Bumper Man may grant to the franchisee. This means that even if Bumper Man agrees to settle or release a claim against the franchisee, the Principal's obligations under the Guaranty remain in full force and effect.
This provision protects Bumper Man by ensuring that the Guaranty remains a solid commitment, regardless of any concessions made to the franchisee. It also clarifies that the Guaranty is continuing and irrevocable during the term of the agreement. The Principal also waives all rights to payments and claims for reimbursement or subrogation against the franchisee arising from their performance under the Guaranty.
For a prospective Bumper Man franchisee, this highlights the importance of understanding the full scope of the Guaranty and its implications for any individual acting as a Principal. The Principal's obligations are independent of the franchisee's and will persist even if Bumper Man makes concessions to the franchisee. This clause is typical in franchising, as franchisors seek to ensure financial obligations are met, even if the franchisee faces difficulties.