For Cicis, what is the impact of a compromise or release of claims on the Guaranty?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Guarantor consents and agrees that: (1) Guarantor's direct and immediate liability under this Guaranty will be joint and several, both with Developer and among other guarantors; (2) Guarantor will render any payment or performance required under the Agreement upon demand if Developer fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Developer or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which we may from time to time grant to Developer 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 will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement; and (5) at our request, each Guarantor shall present updated financial information to us as reasonably necessary to demonstrate such Guarantor's ability to satisfy the financial obligations of Developer under the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, a compromise or release of claims does not diminish the liability of the guarantor. The guarantor's obligations remain in effect during the term of the agreement, regardless of any extensions of time, credit, or other allowances Cicis may grant to the developer or any other person. This includes accepting partial payments or performance, or any compromise or release of claims.
This means that even if Cicis makes concessions to the developer (the franchisee) or another party, the guarantor is still fully responsible for fulfilling the obligations under the guaranty. The guaranty remains continuing and irrevocable throughout the agreement's term. The guarantor's liability is direct, immediate, joint, and several with the developer and other guarantors, and is not contingent upon Cicis pursuing remedies against the developer or any other person.
For a prospective Cicis franchisee, this highlights the importance of understanding the full extent of the guaranty. Individuals considering acting as a guarantor should be aware that their obligations are not lessened by any compromises or releases Cicis might make with the franchisee. They should also be prepared to provide updated financial information to Cicis to demonstrate their ability to meet the financial obligations under the agreement.