What is the significance of the Guaranty being 'absolute, unconditional and irrevocable' for Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GUARANTY (the "Guaranty") is made and entered into as of this day of |
|---|
| , 20, by the undersigned ("Guarantor") who, having |
| received a copy of that certain Sublease of even date herewith (the "Sublease"), between |
| , |
| a |
| limited |
| liability |
| company |
| ("Sublandlord"), |
| and |
| , |
| a(n) |
| ("Subtenant"), |
| for |
| space |
| at |
| , has examined the Sublease and is familiar with |
| all the terms, covenants and provisions contained therein, and as an inducement to Sublandlord |
| to enter into the Sublease, does hereby absolutely, unconditionally and irrevocably guarantee to |
| Sublandlord: (i) the full and prompt payment of all Rent and all other sums and charges payable |
| by Subtenant under the Sublease; (ii) the full and timely performance and observance of all of |
| the covenants, terms, conditions, and agreements therein provided to be performed and observed |
| by Subtenant; (iii) the full and prompt payment of all costs, expenses and reasonable attorneys' |
| fees incurred by Sublandlord in enforcing the Sublease and/or this Guaranty; and (iv) the full and |
| prompt payment to Sublandlord of the amount of any payments made to Sublandlord which are |
| recovered from Sublandlord by a trustee, receiver or creditor of Guarantor or Subtenant pursuant |
| to applicable law; and Guarantor hereby covenants and agrees to and with Sublandlord that if |
| default shall at any time be made by Subtenant in the payment of any Rent or any other sum or |
| charge payable by Subtenant under the Sublease, or if Subtenant should default in the |
| performance and observance of any of the covenants, terms, conditions, or agreements contained |
| in the Sublease, Guarantor will forthwith pay such Rent and such other sums and charges to |
| Sublandlord, and any arrears thereof, and shall forthwith faithfully perform and fulfill all of such |
| terms, covenants, conditions, and agreements. |
Source: Item 22 — Contracts (FDD page 72)
What This Means (2025 FDD)
According to the 2025 FDD, if a guarantor signs an 'absolute, unconditional, and irrevocable' guaranty for a Cd One Price Cleaners sublease, they are making a very strong commitment to ensure the subtenant (likely the franchisee) meets all obligations under the sublease agreement. This type of guaranty means the guarantor is fully responsible for the subtenant's payments, performance, and adherence to all terms, without any conditions or exceptions. The guarantor cannot revoke this guarantee. This protects the sublandlord by providing a direct avenue for recourse if the subtenant fails to meet their obligations.
Specifically, the guarantor is guaranteeing the full and prompt payment of all rent and other charges, as well as the full and timely performance of all terms and conditions outlined in the sublease. This includes covering any costs, expenses, and attorney's fees the sublandlord incurs while enforcing the sublease or the guaranty itself. The guarantor also promises to cover any payments that were initially made to the sublandlord but later recovered by a trustee, receiver, or creditor due to legal proceedings involving the guarantor or subtenant.
For a prospective Cd One Price Cleaners franchisee, this means that if they require a guarantor for their sublease (often a parent, spouse, or business partner), that guarantor is taking on a significant and unwavering responsibility. The guarantor's assets are at risk should the franchisee default on the sublease terms. This type of guarantee is common in franchising, as it provides security to the sublandlord, but potential guarantors should fully understand the extent of their obligation before signing. They should seek legal counsel to fully understand the implications.