Under the Churchs Chicken Guaranty Agreement, what rights does the Guarantor waive?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor shall render any payment or performance required under the Agreement or any other agreement between Developer and Cajun upon demand from Cajun. 2. Waiver. Guarantor waives (a) acceptance and notice of acceptance by Cajun of this
Guaranty; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations of Developer; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right Guarantor may have to require that an action be brought against Developer or any other person or entity as a condition of liability hereunder; (e) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Developer arising as a result of the execution of and performance under this Guaranty by the undersigned; (f) any law or statute which requires that Cajun make demand upon, assert claims against or collect from Developer or any other person or entity (including any other guarantor), foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Developer or any other person or entity (including any other guarantor) prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guaranty; and (g) any and all other notices and legal or equitable defenses to which Guarantor may be entitled.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the Guarantor waives several rights under the Guaranty Agreement. These waivers significantly impact the Guarantor's protections and recourse in the event of the Developer's (franchisee's) default or non-performance.
Specifically, the Guarantor waives the right to:
- Receive acceptance and notice of acceptance of the Guaranty by Cajun.
- Receive notice of demand for payment of any debt or notice of nonperformance of any obligations by the Developer.
- Receive protest and notice of default regarding any guaranteed debt or obligation.
- Require Cajun to first bring an action against the Developer or any other party before pursuing the Guarantor.
- Exercise any rights to payments, claims for reimbursement, or subrogation against the Developer that arise from the Guarantor's obligations under the Guaranty.
- Invoke any law or statute that would compel Cajun to first make a demand, assert claims, collect from the Developer or any other person, foreclose on security interests, sell collateral, exhaust remedies, or take any other action against the Developer before pursuing the Guarantor.
- Assert any other legal or equitable defenses to which the Guarantor might otherwise be entitled.
In essence, these waivers mean that Churchs Chicken (Cajun) can immediately pursue the Guarantor for any of the Developer's obligations without first attempting to collect from the Developer or exhausting other remedies. This places a significant responsibility and risk on the Guarantor, who should fully understand the implications before signing the Guaranty Agreement. It is highly recommended that the guarantor seek independent legal counsel to fully understand the extent of these waivers and their potential liabilities.