What obligations does the Guarantor guarantee to Carvel under the Guaranty?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
FORMANCE**
THIS GUARANTY (the "Guaranty") is made by the undersigned individuals (whether one or more, jointly and severally, the "Guarantor"), in favor of Carvel Franchisor SPV LLC, a Delaware limited liability company ("Franchisor").
- A. Franchisor and «Z1_First_Name», a «Z1_State_of_Formation» «Z1_Entity_Type»«Z2_First_Name»«Z2_Last_Name»«Z3_First_Name»«Z3_Last_Name»«Z 4_First_Name»«Z4_Last_Name»«Z5_First_Name»«Z5_Last_Name» ("Franchisee") are parties to a Franchise Agreement (the "Franchise Agreement").
- B. Guarantor is an owner of Franchisee and anticipates benefitting from the operation of a franchise pursuant to the Franchise Agreement. Guarantor is, therefore, willing to sign this Guaranty. Guarantor acknowledges having read and understood the terms and conditions of the Franchise Agreement.
- C. Franchisor would not have agreed to enter into the Franchise Agreement without this Guaranty.
Guarantor and Franchisor agree as follows:
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- Guaranty. Guarantor guarantees to Franchisor and its successors and assigns the following obligations (collectively, the "Obligations"): (i) the full and prompt payment and performance of all Franchisee's and its owners', officers', directors', agents' and employees' obligations to Franchisor under the Franchise Agreement, any amendment to the Franchise Agreement or any other agreement between Franchisee and Franchisor; and (ii) the full and prompt payment or reimbursement of all amounts, costs, expenses, claims, liabilities, or obligations Franchisor incurs under the Franchise Agreement. Guarantor agrees that if Franchisee does not make payments under the Franchise Agreement when due or perform any obligations required of it in accordance with the Franchise Agreement or satisfy any Obligations Franchisor incurs related to any of them, Guarantor will make the payments and reimbursements and cause the obligations to be performed within 5 days of Franchisor's notice to Guarantor. If there is more than one Guarantor, all the terms in this Guaranty are joint and several.
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- Payment. If Franchisee defaults under the Franchise Agreement, Franchisor may proceed directly against any or each Guarantor without first proceeding against or notifying Franchisee and without proceeding against any other Guarantor.
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- Waivers by Guarantor.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Guarantor ensures specific obligations to Carvel. The Guarantor guarantees the full and prompt payment and performance of all obligations of the Franchisee, including its owners, officers, directors, agents, and employees, to Carvel under the Franchise Agreement, any amendments to it, or any other agreement between the Franchisee and Carvel.
This guarantee also extends to the full and prompt payment or reimbursement of all amounts, costs, expenses, claims, liabilities, or obligations Carvel incurs under the Franchise Agreement. If the Franchisee fails to make payments when due or perform any required obligations, the Guarantor is obligated to make the payments and ensure the obligations are performed within 5 days of receiving notice from Carvel.
The Guarantor also waives certain rights, including rights to payments and claims for reimbursement or subrogation against the Franchisee, rights to require Carvel to proceed against the Franchisee first, and any benefit of security held by Carvel. This ensures that Carvel can directly pursue the Guarantor without needing to exhaust other remedies first. The Guaranty is to be construed under and governed by the law of the State of Georgia.
This arrangement provides Carvel with a direct avenue to secure financial and operational compliance with the Franchise Agreement, mitigating risks associated with franchisee default or non-performance. For a prospective Carvel franchisee, understanding the obligations and waivers within the Guaranty is crucial, especially if they are considering having a guarantor support their franchise venture.