Is the Casa De Corazon Guaranty a continuing guaranty?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
IN CONSIDERATION of the grant by CASA FRANCHISING, LLC ("Franchisor") of Casa de Corazon development rights to the party named as Developer ("Developer") in the Development Agreement to which this Guaranty is attached (the "Development Agreement"), 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 Developer, 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 Developer under the Development Agreement, and (b) the performance by Developer of all its obligations under the Development Agreement. The undersigned further specifically agree to be individually bound by all covenants, obligations, and commitments of Developer contained in the Development Agreement to the same extent as if each of the undersigned had individually been named as Developer in the Development Agreement, and the undersigned had individually executed the Development Agreement.
Source: Item 23 — RECEIPTS (FDD pages 51–215)
What This Means (2025 FDD)
According to the 2025 Casa De Corazon FDD, the guaranty signed by owners is related to the Development Agreement. Specifically, the owners guarantee the payment of all costs and fees and the performance of all obligations under the Development Agreement. The document does not explicitly state whether the guaranty is a continuing one.
However, the language in the guaranty suggests it is tied to the Development Agreement. The guaranty is given "IN CONSIDERATION of the grant by CASA FRANCHISING, LLC...of Casa de Corazon development rights to the party named as Developer...in the Development Agreement". This implies the guaranty is specifically for the obligations arising from that particular Development Agreement.
To determine if the guaranty extends beyond the initial Development Agreement or covers future agreements, a prospective Casa De Corazon franchisee should seek clarification from the franchisor. Specifically, they should ask if a new guaranty is required for each subsequent franchise agreement or if the initial guaranty covers all future obligations.