What obligations of the Developer does the Guarantor guarantee to Carls Jr.?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
- **1.
Guarantee To Be Bound By Certain Obligations.** Guarantors hereby personally and unconditionally guarantee to CJR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement or at law or in equity, that each will be personally bound by the restrictions contained in Section 12 of the Agreement.
- **2.
Guarantee and Assumption of Developer's Obligations.** Guarantors hereby: (A) guarantee to CJR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement or at law or in equity, that Developer and any assignee of Developer's interest under the Agreement shall (1) punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement and (2) punctually pay all other monies owed to CJR and/or its affiliates; (B) agree to be personally bound by each and every provision in the Agreement, including, without limitation, the provisions of Sections 12 and 16; and (C) agree to be personally liable for the breach of each and every provision in the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the Guarantors guarantee specific obligations of the Developer to Carls Jr. The Guarantors guarantee that they will be personally bound by the restrictions outlined in Section 12 of the Development Agreement, which likely covers aspects such as confidentiality, non-compete clauses, and protection of Carls Jr.'s proprietary information.
Furthermore, the Guarantors guarantee that the Developer will punctually pay and perform every undertaking, agreement, and covenant detailed in the Development Agreement. This includes ensuring that the Developer pays all monies owed to Carls Jr. and/or its affiliates. The Guarantors also agree to be personally bound by every provision in the Development Agreement, including Sections 12 and 16, and to be personally liable for any breaches of these provisions.
In essence, the guarantee ensures that if the Developer fails to meet its financial or operational obligations under the Development Agreement, Carls Jr. can seek recourse directly from the Guarantors. This provides Carls Jr. with an additional layer of security and assurance that the terms of the agreement will be fulfilled. This is a common practice in franchising, as it mitigates the risk for the franchisor by ensuring there are individuals who are ultimately responsible for the franchisee's performance.