Under the Cd One Price Cleaners Guaranty, what is being guaranteed to the Sublandlord?
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 Cd One Price Cleaners FDD, the Guaranty ensures the Sublandlord receives certain payments and performance from the Subtenant. Specifically, the Guarantor absolutely, unconditionally, and irrevocably guarantees to the Sublandlord: the full and prompt payment of all rent and other sums and charges payable by the Subtenant under the Sublease; the full and timely performance of all covenants, terms, conditions, and agreements to be performed by the Subtenant; the full and prompt payment of all costs, expenses, and reasonable attorneys' fees incurred by the Sublandlord in enforcing the Sublease and/or the Guaranty; and the full and prompt payment of any payments made to the Sublandlord which are recovered from the Sublandlord by a trustee, receiver, or creditor of the Guarantor or Subtenant pursuant to applicable law. The Guarantor also agrees to pay any arrears and faithfully perform all terms, covenants, conditions, and agreements if the Subtenant defaults.
This means that if the Cd One Price Cleaners franchisee (Subtenant) fails to pay rent or meet other obligations under the Sublease, the Guarantor is legally bound to cover those costs and fulfill those obligations to the Sublandlord. This guarantee provides the Sublandlord with a layer of financial security, ensuring they receive the payments and performance they are entitled to under the Sublease agreement, even if the franchisee faces financial difficulties.
This type of guaranty is common in commercial leasing situations, as it mitigates the Sublandlord's risk by providing an additional party responsible for the Subtenant's obligations. For a prospective Cd One Price Cleaners franchisee, it's crucial to understand the implications of this Guaranty, especially if they are acting as the Guarantor. They should carefully review the Sublease and Guaranty documents to fully grasp the extent of their financial and performance obligations to the Sublandlord.