Does the Guaranty and Assumption of Obligations for a Chem Dry franchise cover the arbitration requirements outlined in the agreement?
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 explicitly covers the arbitration requirements outlined in the franchise agreement. Each undersigned party personally and unconditionally guarantees that the franchisee will perform every agreement and covenant set forth in the agreement.
Specifically, the guaranty includes being personally bound by and personally liable for the breach of every provision in the agreement, including any amendments or modifications. This extends to obligations to take or refrain from taking specific actions, including the arbitration requirements. This means that individuals signing the Guaranty and Assumption of Obligations are not only ensuring the franchisee's financial and operational compliance but also their adherence to the arbitration terms.
For a prospective Chem Dry franchisee, this implies that any individual signing the Guaranty and Assumption of Obligations (often owners or major stakeholders) must understand that their personal assets and actions could be at stake if the franchisee fails to meet the obligations, including going to arbitration if required. This is a significant commitment and should be carefully considered with legal counsel.