Is the Buns On Fire Guaranty a guaranty of payment when due or merely a guaranty of collection?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
ny and all costs and expenses (including reasonable attorneys' fees and expenses) incurred by Licensor in enforcing any rights under this Guaranty.
Guarantor(s) expressly acknowledge that Guarantor(s) have read the Franchise Agreement and the Exclusive Supply Agreement and understand the same. If there is more than one Guarantor, the terms and conditions of this Guaranty shall apply to all Guarantors and they shall all be jointly and severally liable for all obligations. The liability of Guarantor(s) is coextensive with that of Franchisee and also joint and several and legal action may be brought against Guarantor(s) and carried to final judgment either with or without making Franchisee or any assignee or successor thereof as a party thereto.
This Guaranty constitutes a guaranty of payment when due and not merely of collection, and Guarantor specifically agrees that it shall not be necessary or required that Licensor exercise any right, assert any claim or demand or enforce any remedy whatsoever against the Franchisee or any other person before or as a condition to the obligations of Guarantor hereunder.
2. Acceleration of Guaranty.
Guarantor agrees that, in the event of any Default described in the Agreements, and if such Default shall occur at a time when any of the Obligations of the Franchisee may not then be due and payable, Guarantor agrees that it will pay to Licensor forthwith the full amount which would be payable hereunder by Guarantor if all such Obligations were then due and payable.
3. Guaranty Absolute.
This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment and shall remain in full force and for the full term of the Limited Intellectual Property License Agreement and the full term of the Exclusive Supply Agreement referenced above and any extensions of either agreement thereof. Guarantor guarantees that the Obligations of Franchisee will be paid Personal
Guaranty for license fees & invoices strictly in accordance with the terms of the Agreements, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Licensor with respect thereto.
4. Reinstatement.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the Guaranty constitutes a guaranty of payment when due, not merely a guaranty of collection. This means that Buns On Fire does not have to first attempt to collect from the franchisee or any other person before enforcing the Guaranty against the guarantor. The guarantor is immediately responsible for payment upon default.
The Guaranty is continuing, absolute, unconditional, and irrevocable for the full term of the Limited Intellectual Property License Agreement and the Exclusive Supply Agreement, including any extensions. The guarantor is responsible for ensuring the franchisee's obligations, such as license fees and invoices, are paid strictly according to the terms of the agreements, regardless of any changes in laws or regulations.
Furthermore, the guarantor waives any requirement for Buns On Fire to provide notice of acceptance or to take action against the franchisee before pursuing the guarantor. The guarantor also agrees that the Guaranty will remain effective even if any payments made by the franchisee are later rescinded or must be restored due to insolvency, bankruptcy, or reorganization. This comprehensive Guaranty ensures that Buns On Fire has a direct and immediate recourse to the guarantor in case of any default by the franchisee.