Under the Cinnabon Guaranty, what is the implication if there is more than one Guarantor?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
If there is more than one Guarantor, all the terms in this Guaranty are joint and several.
Payment.
If Franchisee defaults under the Franchise Agreement, Franchisor may proceed directly against any or each Guarantor without first proceeding against or notifying Franchisee and without proceeding against any other Guarantor.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to Cinnabon's 2025 Franchise Disclosure Document, if there is more than one guarantor for a Cinnabon franchise, all terms in the Guaranty are considered joint and several. This means that each guarantor is individually and collectively responsible for the full obligations outlined in the Guaranty.
In practical terms, Cinnabon can pursue any one or all of the guarantors for the full amount of the debt or obligation if the franchisee defaults. The franchisor is not required to first seek payment from the franchisee or to pursue other guarantors before targeting a specific guarantor. This provides Cinnabon with a direct and efficient way to recover any losses in case of a default.
This arrangement benefits Cinnabon by providing a more secure guarantee, as they have multiple parties fully liable for the franchisee's obligations. However, it poses a significant risk to the guarantors, as each could be held responsible for the entire debt, regardless of the contributions or actions of the other guarantors. Prospective Cinnabon franchisees should carefully consider the implications of this joint and several liability before agreeing to act as a guarantor.