Under the Carbones Pizzeria Guaranty, what specific obligations of the Franchisee are guaranteed?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
IN CONSIDERATION of the [INSERT ONE/DELETE REMAINING ONE] [grant by M & T Pizza Incorporated ("Franchisor") of a Carbone's Pizza franchise to the party named as Franchisee in the Franchise Agreement (the "Franchisee") to which this Guaranty is attached (the "Franchise Agreement")] OR [consent by M & T Pizza Incorporated ("Franchisor") to the assignment of the Franchise Agreement to which this Guaranty is attached (the "Franchise Agreement") to the assignee and party named as the Franchisee in the Franchise Agreement ("Franchisee")], and for other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned hereby guarantee (jointly and severally with one another and all other guarantors of Franchisee, whether such guaranties are entered into prior to or after the date hereof) to Franchisor and to Franchisor's successors and assigns: (a) the payment of all costs and fees required to be paid to Franchisor or its affiliates by Franchisee, whether such costs and fees are provided for in the Franchise Agreement or under any other agreement between Franchisee and Franchisor or an affiliate of Franchisor, and (b) the performance by Franchisee of all its obligations under all such agreements and under all manuals and operating procedures of Franchisor's business system. The undersigned further specifically agree to remain individually bound by all covenants, obligations, and commitments of Franchisee contained in the Franchise Agreement and such other agreements to the same extent as if each of the undersigned had individually been named as Franchisee in the Franchise Agreement and such other agreements, and the undersigned had individually executed the Franchise Agreement and such other agreements.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the Guaranty agreement ensures that a guarantor (likely a principal of the franchisee entity) will cover the franchisee's obligations to Carbones Pizzeria. This includes two primary areas. First, the guarantor ensures the payment of all costs and fees that the franchisee is required to pay to Carbones Pizzeria or its affiliates. These costs and fees can arise from the Franchise Agreement itself or from any other agreement between the franchisee and Carbones Pizzeria or its affiliates. Second, the guarantor guarantees the franchisee's performance of all obligations outlined in these agreements, as well as compliance with all manuals and operating procedures of the Carbones Pizzeria business system.
In practical terms, this means that if the Carbones Pizzeria franchisee fails to pay royalties, advertising fees, or any other financial obligation, the guarantor is personally liable for those payments. Similarly, if the franchisee violates the terms of the Franchise Agreement or fails to adhere to the operational standards set by Carbones Pizzeria, the guarantor is responsible for ensuring that the franchisee corrects these issues. The guarantor is essentially stepping into the shoes of the franchisee and promising that all aspects of the franchise agreement will be fulfilled.
This Guaranty remains in effect regardless of any modifications to the Franchise Agreement, waivers granted by Carbones Pizzeria, or extensions of time given to the franchisee. The guarantor's obligations are only reduced if the franchisee's liability is directly and equally reduced. Furthermore, the guarantor's obligations are not affected by any bankruptcy or reorganization of the franchisee. Carbones Pizzeria can enforce the Guaranty with just ten days' written notice to the guarantor if the franchisee defaults on any of their obligations. This is a significant commitment and should be carefully considered by anyone acting as a guarantor for a Carbones Pizzeria franchise.