Does the acceptance of partial payment affect the Guarantor's liability to Chocolate Fish Coffee?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the guarantor's liability is not affected by the acceptance of any partial payment. The guarantor agrees that their liability will not be diminished, relieved, or otherwise affected by the acceptance of any partial payment or performance. This means that even if Chocolate Fish Coffee accepts a partial payment from the franchisee, the guarantor remains fully liable for the remaining balance or obligation.

This provision protects Chocolate Fish Coffee by ensuring that the guarantor remains responsible for the franchisee's obligations, even if the franchisor makes concessions or accepts partial fulfillment of those obligations. It is a common practice in franchising to have a guarantor, especially when the franchisee is a newly formed entity or has limited financial history, to provide an additional layer of security for the franchisor.

For a prospective Chocolate Fish Coffee franchisee, this means that if a guarantor is required, that person or entity must understand that their liability is comprehensive and not reduced by any partial payments or compromises made between the franchisee and Chocolate Fish Coffee. The guarantor should carefully consider the financial capabilities of the franchisee before agreeing to guarantee the obligations under the Franchise Agreement.