What obligations under the Franchise Agreement must owners of a Burros Fries franchise personally guarantee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
This Guaranty is a Schedule to the Franchise Agreement between Burros & Fries Franchise, Inc., a California corporation ("Franchisor") and ("Franchisee") dated the day of , 20.
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- The undersigned agree, individually and on behalf of his or her martial community, to personally and unconditionally guarantee the performance of Franchisee under the Franchise Agreement and to perform all obligations under this Agreement on default by Franchisee. The undersigned further agree to pay any judgment or award against Franchisee obtained by Franchisor. Guarantors are also bound by covenants of the Agreement that by their nature or terms survive the expiration or termination of the Agreement, including but not limited to noncompetition, indemnity and non-disclosure provisions.
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- Each Guarantor has consulted legal counsel of his/her own choosing as to his/her responsibilities and liabilities under this Guaranty.
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- Each Guarantor waives:
- (a) Notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed;
- (b) Protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations guaranteed;
- (c) Any right he or she may have to require that an action be brought against Franchisee or any other person as a condition of liability;
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- Each Guarantor consents and agrees that:
- (a) Liability under this Guaranty is joint and several with any other guarantor and the Franchisee;
- (b) Each will render any payment or performance required under this Guaranty on demand, if Franchisee fails or refuses punctually to do so;
- (c) Each will individually comply with the provisions and all subsections of the Agreements and associated documents;
- (d) Liability is not contingent or conditioned on Franchisor's pursuit of any remedies against Franchisee or any other persons; and
- (e) Liability is not affected by any extension of time, acceptance or part performance, release of claims, or other compromise that Franchisor may grant Franchisee or other person, including 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 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 44–45)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, if the franchisee is a corporation, partnership, or other entity, the owners must individually and unconditionally guarantee the performance of the franchisee under the Franchise Agreement. This means the guarantors agree to fulfill all obligations outlined in the agreement if the franchisee defaults.
Specifically, the guarantors also commit to paying any judgment or award obtained by Burros Fries against the franchisee. The obligations extend beyond the agreement's term, including adherence to non-competition, indemnity, and non-disclosure provisions even after the agreement expires or terminates. Each guarantor confirms they have sought independent legal counsel regarding their responsibilities and liabilities under the guaranty.
The guarantors waive their right to receive notice of demand for payment, notice of default, or to require Burros Fries to first pursue action against the franchisee. Their liability is joint and several with the franchisee and any other guarantor, meaning each guarantor is fully responsible for the entire obligation. They must make any payment or performance required under the guaranty on demand if the franchisee fails to do so. The guarantor's liability is not contingent on Burros Fries pursuing remedies against the franchisee and is not affected by any extensions of time or compromises granted to the franchisee.