Can the Casa De Corazon Guaranty be revoked?
Casa_De_Corazon Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned Developer ("Developer") represents and warrants to CASA FRANCHISING, LLC ("Franchisor") that as of the date set forth below all of the information below is true and complete:
Ownership (EACH OWNER MUST SIGN A GUARANTY) NAME OF OWNER NO. OF SHARES/UNITS OWNED OWNERSHIP PERCENTAGE % % % % Management (LIST EACH INDIVIDUAL HOLDING A POSITION AS BOARD-MEMBER OR OFFICER) NAME OF INDIVIDUAL ROLE/TITLE Management and Guaranty executed by all owners of Developer. Developer acknowledges that this Statement of Ownership and Management applies to the Casa de Corazon Development Agreement. Developer shall immediately notify Franchisor upon any change in the information contained in this Statement of Ownership and Management, and upon request of Franchisor, complete an updated or new Statement of Ownership and DEVELOPER: Date: By: Name: Title:
GUARANTY
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)
Based on the 2025 Franchise Disclosure Document, the excerpts provided do not contain information regarding the ability to revoke the Guaranty for a Casa De Corazon franchise. The excerpts do mention the Guaranty in the context of the Development Agreement, stating that each owner must sign a guaranty. It also specifies that the guarantors are jointly and severally responsible for the developer's obligations under the Development Agreement.
However, the excerpts do not elaborate on the circumstances under which the Guaranty can be revoked or terminated. The Guaranty ensures that the franchisor is protected in case the developer fails to meet their financial or performance obligations. Without specific details on revocation, it is unclear whether a guarantor can be released from their obligations under certain conditions.
A prospective Casa De Corazon franchisee should seek clarification from the franchisor regarding the terms of the Guaranty, specifically addressing whether it can be revoked or if there are conditions under which a guarantor can be released from their obligations. Understanding the duration and potential release conditions of the Guaranty is crucial for all parties involved, especially the owners signing the guaranty.
To fully understand the terms and conditions of the Guaranty, a prospective franchisee should ask Casa De Corazon the following questions:
- Under what circumstances, if any, can the Guaranty be revoked by the guarantor?
- Are there specific performance milestones or financial thresholds that, if met, would allow a guarantor to be released from their obligations?
- What is the process for requesting a release from the Guaranty, and what documentation or evidence is required to support such a request?