Under the Buns On Fire Guaranty, is the Guarantor's liability coextensive with that of the Buns On Fire Franchisee?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
The liability of Guarantor is coextensive with that of Franchisee and also joint and several and an action or suit may be brought against Guarantor, and carried to final judgment and/or completion and recovery had, either with or without making Franchisee a party thereto. Guarantor waives any right to require that any action be brought against Franchisee. The obligations of Guarantor shall extend with any extension of the term of the Agreements and shall apply with respect to the full and faithful performance and observance of all the terms and conditions of the Agreements. Guarantor does hereby authorize and empower any attorney of any court of record of the State of Illinois or elsewhere to appear for and to enter judgment against him, in favor of Licensor for any sums due under the Agreements plus interest with costs of suit, release of errors, without stay of execution, and with reasonable attorney's fee, and Guarantor hereby waives and releases all benefit and relief from any and all appraisement, stay or exemption laws of any state now in force or hereafter to be passed. To the fullest extent permitted by law, Guarantor waives all rights to a trial by jury in any action related to this Guaranty.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the liability of the Guarantor is indeed coextensive with that of the Franchisee. This means that the Guarantor's responsibility to fulfill the obligations under the franchise agreement is the same as the Franchisee's. Furthermore, the liability is joint and several, meaning that Buns On Fire can pursue legal action against the Guarantor without necessarily involving the Franchisee.
This arrangement offers Buns On Fire significant protection, as they can seek recourse directly from the Guarantor if the Franchisee fails to meet their obligations. The Guarantor also waives any right to demand that legal action be first brought against the Franchisee, streamlining the process for Buns On Fire to recover any owed payments or enforce compliance with the franchise agreement.
The Guarantor's obligations extend with any extension of the franchise term, ensuring continuous coverage throughout the duration of the agreement. The Guarantor also empowers any attorney of any court of record in Illinois or elsewhere to appear and enter judgment against them for any sums due under the agreements, including interest and attorney's fees. Additionally, the Guarantor waives rights to a jury trial and benefits from appraisement, stay, or exemption laws, further solidifying their commitment to fulfilling the Franchisee's obligations.
For a prospective Buns On Fire franchisee, this highlights the importance of carefully selecting a Guarantor who is financially stable and fully understands the extent of their obligations. The Guarantor should be aware that their assets are at risk should the franchisee default on their agreement with Buns On Fire.