During the term of the Checkersrallys agreement, is the guaranty continuing and irrevocable?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (i) his direct and immediate liability under this guaranty shall be joint and several; (ii) he shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so; (iii) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Franchisee or any other person; and (iv) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which the Franchisor may from time to time grant to Franchisee or to any other person including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable during the term of the agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, the guaranty signed by the franchisee's owners is continuing and irrevocable during the term of the agreement. This means that the personal guaranty provided by the owners remains in effect throughout the entire duration of the franchise agreement.
Specifically, the owners waive several rights, including the right to require Checkersrallys to first pursue action against the franchisee before seeking recourse from the guarantors. They also consent to joint and several liability, meaning each guarantor is fully responsible for the franchisee's obligations. The guaranty remains in effect even if Checkersrallys grants extensions of time or credit to the franchisee.
This clause has significant implications for prospective Checkersrallys franchisees. The personal guaranty is a serious commitment, as it makes the owner(s) personally liable for the financial obligations and performance of the franchise. The "continuing and irrevocable" nature of the guaranty means that owners cannot simply revoke their guarantee during the term of the agreement. Prospective franchisees should carefully consider the financial risks and obligations associated with the franchise before signing the agreement and the guaranty.