Can an extension of time granted to the Chem Dry franchisee affect the guarantor's liability?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Each of the undersigned consents and agrees: (1) his or her direct and immediate liability under this Guaranty will be joint and several, both with Franchisee and among other guarantors; (2) he or she will render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchisee or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which we 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 (including the release of other guarantors), none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement (including extensions), for so long as any performance is or might be owed under the Agreement by Franchisee or its owners, and for so long as we have any cause of action against Franchisee or its owners; and (5) this Guaranty will continue in full force and effect for (and as to) any extension or modification of the Agreement and despite the transfer of any interest in the Agreement or Franchisee, and each of the undersigned waives notice of any and all renewals, extensions, modifications, amendments, or transfers.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, a guarantor's liability remains unaffected by any extensions of time, credit, or other allowances granted to the franchisee. The guarantor's obligations persist regardless of any modifications to the agreement terms. This means that even if Chem Dry provides the franchisee with more time to meet their obligations, the guarantor is still fully responsible for ensuring those obligations are met.
The guarantor's liability is not contingent upon Chem Dry pursuing remedies against the franchisee or any other person. The guarantor is directly and immediately liable, jointly and severally, with the franchisee and other guarantors. This underscores the comprehensive nature of the guarantee, designed to protect Chem Dry's interests throughout the term of the agreement, including any extensions.
Furthermore, the guarantor waives any rights to reimbursement or subrogation against the franchisee and acknowledges that the guaranty remains in full effect even with extensions or modifications to the agreement. This waiver includes notice of acceptance, demand for payment, or default. This ensures that the guarantor cannot claim relief from their obligations based on changes to the agreement or lack of notification.