Can a Carvel Guarantor assign the Guaranty without the Franchisor's consent?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Successors and Assigns. The provisions of this Guaranty will bind Guarantor and Guarantor's respective heirs and personal representatives and will benefit Franchisor and its respective successors and assigns. Guarantor will not assign this Guaranty without Franchisor's prior written consent. Guarantor's death will not terminate this Guaranty and the same will be enforceable against Guarantor's estate. This Guaranty will continue in full force and effect and remain enforceable against each Guarantor if Franchisee or any owner of Franchisee transfers any interest in the Franchise Agreement or Franchisee.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a Guarantor cannot assign the Guaranty without the Franchisor's prior written consent. The Guaranty agreement binds the Guarantor and their heirs, benefiting Carvel and its successors. Even the death of a Guarantor does not terminate the Guaranty, making it enforceable against the Guarantor's estate.
This requirement protects Carvel by ensuring that the financial and performance guarantees remain in place with an approved party. The clause prevents a Guarantor from unilaterally transferring their obligations to someone Carvel has not vetted or approved. This is particularly important because Carvel relies on the Guarantor's commitment to mitigate risks associated with franchisee performance.
For a prospective Carvel franchisee, this means that if a Guarantor is part of the franchise agreement, that Guarantor cannot simply transfer their obligations to another party without Carvel's express permission. This provision ensures the stability and reliability of the financial backing for the franchise, as Carvel retains control over who is ultimately responsible for guaranteeing the franchisee's obligations.