What is the guarantor warranting regarding Recitals A and B in the Cinch I.T. guaranty agreement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
| This guaranty agreement is entered into on this day of, 20, | ||
|---|---|---|
| between of | ||
| ("Guarantor") and Cinch Franchise, LLC with its principal place of business at 27 West | ||
| Mountain Street, Worcester, Massachusetts 01606 ("Franchisor"). | ||
| WHEREAS: | ||
| A. | Franchisor and("Multi-Unit Developer") have | |
| entered into a Multi-Unit Development Agreement dated | ||
| B. | Guarantor is a shareholder, director, officer, member, manager, owner and/or partner of | |
| Multi-Unit Developer. | ||
| C. | In consideration of and as an inducement to Franchisor to enter into the Multi-Unit | |
| Development Agreement with Multi-Unit Developer, Guarantor hereby covenants and | ||
| agrees as follows: | ||
| 1. | Guarantor warrants that the facts contained in Recital A and B are correct; |
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, the guarantor warrants that the facts contained in Recital A and Recital B of the guaranty agreement are correct. Recital A states that the Franchisor and Franchisee have entered into a Franchise Agreement dated a specific date. Recital B states that the Guarantor is a shareholder, director, officer, member, trustee, and/or partner of the Franchisee.
In simpler terms, the guarantor is confirming the accuracy of two key statements: first, that a franchise agreement exists between Cinch I.T. and the franchisee; and second, that the guarantor has a specific relationship (shareholder, director, etc.) with the franchisee. This warranty is a legal assurance that these foundational facts are true and accurate as the guarantor understands them.
This is a standard practice in franchising when the franchisee is a business entity rather than an individual. Cinch I.T. seeks assurance that the person signing the guaranty has a legitimate connection to the franchisee business and that the franchise agreement is indeed in place. By warranting the accuracy of these recitals, the guarantor acknowledges their understanding of the agreement and their role in ensuring the franchisee's obligations are met.