Who pays the costs of enforcing the Chocolate Fish Coffee Guaranty?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Guarantor shall pay to Chocolate Fish Franchising all costs incurred by Chocolate
Fish Franchising (including reasonable attorney fees) in enforcing this Guaranty. If multiple Guarantors sign this Guaranty, each will have joint and several liability.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to the 2024 Chocolate Fish Coffee Franchise Disclosure Document, the guarantor is responsible for covering all costs Chocolate Fish Coffee incurs while enforcing the Guaranty. This includes reasonable attorney fees. If there are multiple guarantors, each of them will be held jointly and severally liable, meaning Chocolate Fish Coffee can pursue any one or all of them for the full amount of the costs.
In practice, this means that if a Chocolate Fish Coffee franchisee defaults on their obligations and the franchisor has to take legal action to enforce the guaranty, the guarantor (typically an owner or principal executive) will be responsible for paying Chocolate Fish Coffee's legal bills and other associated costs. This provision is designed to protect Chocolate Fish Coffee's financial interests in the event of a franchisee breach.
This is a fairly standard clause in franchise agreements. It ensures that the franchisor can recover its expenses in enforcing the agreement, rather than having to absorb those costs themselves. Prospective Chocolate Fish Coffee franchisees should carefully consider the implications of the guaranty and ensure they understand their potential financial exposure if the franchisee fails to meet its obligations.