Does the Guaranty and Assumption of Obligations for a Chem Dry franchise continue if the agreement is extended?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
In consideration of, and as an inducement to, the execution of the Franchise Agreement on this date by CDI, each of the undersigned personally and unconditionally (a) guarantees to us and our successors and assigns, for the term of the Agreement (including extensions) and afterward as provided in the Agreement, that Franchisee will punctually pay and perform each and every undertaking, agreement, and covenant set forth in the Agreement (including any amendments or modifications of the Agreement) and will punctually pay the Business Note issued by Franchisee in conjunction with the execution and delivery of the Agreement, and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement (including any amendments or modifications of the Agreement), and by any failure to pay principal of or interest on the Business Note, including without limitation monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including the non-competition, confidentiality, transfer, and arbitration requirements.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the Guaranty and Assumption of Obligations extends for the term of the Franchise Agreement, including any extensions. The guarantor personally guarantees that the franchisee will fulfill all obligations outlined in the agreement, including any amendments or modifications, and will punctually pay the Business Note.
This means that anyone signing the Guaranty and Assumption of Obligations is responsible for the franchisee's performance and debts throughout the entire duration of the franchise agreement, even if the agreement is extended beyond its initial term. This includes, but is not limited to, monetary obligations, specific actions the franchisee must take or refrain from taking, and adherence to non-competition, confidentiality, transfer, and arbitration requirements.
For a prospective Chem Dry franchisee, this implies that anyone acting as a guarantor needs to fully understand the long-term commitment they are making. The guarantor's obligations are not limited to the initial term of the agreement but continue if the franchise agreement is extended. It is crucial for potential guarantors to carefully review the franchise agreement and any potential extensions to fully grasp the scope of their responsibilities and liabilities.