Under the Chicken Guy Guarantee, is the Guarantor's liability joint, several, or both?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (i) his direct and immediate liability under this Guarantee 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 Chicken Guy of any remedies against Franchisee or any other person; (iv) such liability shall not be diminished, relieved or otherwise affected by any amendment of the Agreement, any extension of time, credit or other indulgence which Chicken Guy 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 Guarantee, which shall be continuing and irrevocable during the term of the Agreement and for so long thereafter as there are monies or obligations owing from Franchisee to Chicken Guy or its affiliates under the Agreement; and (v) monies received from any source by Chicken Guy for application toward payment of the obligations under the Agreement and under this Guarantee may be applied in any manner or order deemed appropriate by Chicken Guy.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the liability of a guarantor under the Guarantee is both joint and several. This means that each guarantor is individually liable for the full amount of the franchisee's obligations, as well as collectively liable with the other guarantors. Chicken Guy can pursue any one guarantor for the entire debt, regardless of whether other guarantors exist or what their individual contributions might be.
This type of guarantee is common in franchising, as it provides the franchisor with maximum protection against default by the franchisee. It allows Chicken Guy to pursue the guarantor with the most accessible assets without first having to pursue the franchisee or other guarantors. This can expedite the recovery of funds and reduce the franchisor's legal costs.
For a prospective Chicken Guy franchisee, this means that if you are asked to be a guarantor, you are taking on significant personal financial risk. It is important to fully understand the obligations of the franchisee and to assess your own financial capacity to cover those obligations if the franchisee defaults. You should also seek legal advice to fully understand the implications of a joint and several guarantee before signing any agreement.