Under what conditions can the Franchisor proceed against the Burros Fries Guarantor?
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.
-
- 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.
-
- Each Guarantor has consulted legal counsel of his/her own choosing as to his/her responsibilities and liabilities under this Guaranty.
-
- 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;
-
- 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 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the franchisor can proceed against the guarantor under the franchise agreement if the franchisee defaults on their obligations. The guarantor provides an unconditional guarantee of the franchisee's performance and agrees to fulfill all obligations if the franchisee fails to do so. This includes paying any judgments or awards obtained by Burros Fries against the franchisee.
The guarantor's liability is not contingent on Burros Fries first pursuing remedies against the franchisee. The guarantor is jointly and severally liable with the franchisee and any other guarantors. This means Burros Fries can seek full payment or performance from any one of them without having to pursue the others.
The guarantor also waives certain rights, including the right to receive notice of demand for payment or notice of default. They also waive the right to require Burros Fries to first bring an action against the franchisee before pursuing the guarantor. The guarantor's obligations remain in effect even if Burros Fries grants extensions of time, accepts partial performance, releases claims, or makes other compromises with the franchisee. These actions do not modify or amend the guaranty, which remains continuing and irrevocable during the term of the franchise agreement. This arrangement is typical in franchising, as it provides the franchisor with added financial security.