Under the Burneys Sweets More agreement, what costs are the guarantor responsible for?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
NC.
ATTACHMENT 4 TO FRANCHISE AGREEMENT
PERSONAL GUARANTY AND AGREEMENT TO BE BOUND PERSONALLY BY THE TERMS AND CONDITIONS OF THE FRANCHISE AGREEMENT
In consideration of the execution of the Franchise Agreement, (together with any revisions, modifications, and amendments thereto, the "Agreement") between DMG BURNEY, INC. ("Franchisor") and _____________________ ("Franchisee") dated of even date herewith, the undersigned (each a "Guarantor"), for themselves, their heirs, successors, and assigns, do jointly, individually, and severally hereby become surety and guarantor for the payment of all amounts and the performance of the covenants, terms, and conditions in the Agreement, to be paid, kept and performed by the Franchisee.
- A. Except for those designated as "Spouse" and not "Owner" in the signature block below, each Guarantor, individually and jointly, hereby agree to be personally bound by each and every condition and term contained in the Agreement, including but not limited to the noncompete, non-solicitation, dispute resolution, and indemnification provisions, and agree that this Personal Guaranty will be construed as though each Guarantor and each of its heirs, successors, and assigns executed an agreement containing the identical terms and conditions of the Agreement. If a Guarantor is an Owner, Guarantor hereby (1) makes all representations of, and (2) accepts and agrees to comply with all obligations of, owners, shareholders, members, and partners of the Franchisee as set forth in the Agreement.
- B. Each Guarantor's liability under this Personal Guaranty shall be direct, immediate, and independent of the liability of, and shall be joint and several with, Franchisee and, as applicable, any other guarantors of Franchisee. Each Guarantor shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Burneys Sweets More FDD, a guarantor assumes significant financial and legal responsibilities. As stated in the Personal Guaranty and Agreement, the guarantor becomes surety for the payment of all amounts and the performance of all terms and conditions within the Franchise Agreement. This means the guarantor is liable if the franchisee fails to meet their financial or operational obligations.
Specifically, the guarantor is responsible for ensuring that all payments are made and all covenants are kept by the franchisee. This includes, but is not limited to, the non-compete, non-solicitation, dispute resolution, and indemnification provisions outlined in the agreement. The agreement clarifies that the personal guaranty will be interpreted as though the guarantor had signed the franchise agreement themselves, binding them to the same terms and conditions as the franchisee.
The guarantor's liability is direct, immediate, and independent of the franchisee's liability. This means that Burneys Sweets More can seek payment or performance directly from the guarantor without first pursuing the franchisee. The guarantor's obligations are joint and several with the franchisee and any other guarantors, increasing the likelihood that the guarantor will be held responsible for the franchisee's debts and actions under the franchise agreement. Therefore, anyone considering acting as a guarantor should fully understand the extensive financial and legal risks involved.