Under the Burros Fries Individual Guaranty, what does each guarantor agree to 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 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, the Individual Guaranty requires the guarantor to personally and unconditionally guarantee the franchisee's performance under the Franchise Agreement. This means that if the franchisee, which is a corporation, partnership, or other entity, fails to meet its obligations, the guarantor is responsible for ensuring those obligations are fulfilled.
Specifically, the guarantor agrees to perform all obligations under the Franchise Agreement if the franchisee defaults. Additionally, the guarantor is responsible for paying any judgment or award obtained by Burros Fries against the franchisee. The guarantors are also bound by the covenants of the agreement that survive its termination, including non-competition, indemnity, and non-disclosure provisions.
Each guarantor also consents to joint and several liability with any other guarantor and the franchisee, meaning Burros Fries can pursue any or all of them for the full amount of the obligation. The guarantor's liability is not contingent on Burros Fries pursuing remedies against the franchisee first, and it is not affected by any extensions of time or compromises that Burros Fries may grant to the franchisee. This ensures that Burros Fries has a direct avenue to recover any losses or enforce the agreement, providing them with a security measure beyond the business entity of the franchisee.