Under the Carvel Guaranty, what happens if any provision violates a usury statute?

According to Carvel's 2025 Franchise Disclosure Document, Section 10 of the Guaranty addresses the severability of its provisions. Specifically, if any part of the Guaranty violates an applicable usury statute or any other applicable law, the obligations under the guaranty will be reduced to the legally permitted limit. However, the obligation will still be fulfilled to the maximum extent that is legally valid. This provision ensures that the rest of the Guaranty remains enforceable even if one part is found to be illegal.

For a prospective Carvel franchisee, this means that the Guaranty is designed to comply with usury laws, which regulate the amount of interest that can be charged on a debt. If a provision is found to violate these laws, the amount owed will be adjusted to comply with the legal limit, rather than invalidating the entire agreement. This protects Carvel by ensuring they can still collect the maximum legally permissible amount, while also protecting the guarantor from illegal interest charges.

This clause provides a degree of security for both Carvel and the guarantor. Carvel is assured that the obligations will be upheld to the fullest extent legally possible, and the guarantor is protected from potentially illegal or unenforceable terms. This is a fairly standard practice in franchise agreements to ensure enforceability and compliance with applicable laws.