Under the Cinnabon Guaranty, what specific notices is the Guarantor waiving?
Cinnabon Franchise · 2025 FDDAnswer from 2025 FDD Document
notices of demand for payment of any indebtedness or non-performance of any Obligations hereby guaranteed, protest, notices of dishonor, notices of default to any party with respect to the indebtedness or nonperformance of any Obligations guaranteed by Guarantors, and any other notices and legal or equitable defenses to which a Guarantor may be entitled. Franchisor shall have no present or future duty or obligation to the Guarantors under this Guaranty, and each Guarantor waives any right to claim or assert any such duty or obligation, to discover or disclose to any Guarantor any information, financial or otherwise, concerning Franchisee, any Guarantor, or any collateral securing any Obligations of Franchisee to Franchisor. Without affecting the Obligations of Guarantor under this Guaranty, Franchisor may, without notice to any Guarantor, (a) extend, modify, supplement, waive strict compliance with, or release all or any provisions of the Franchise Agreement or any indebtedness or Obligation, (b) settle, adjust, release, or compromise (including if made in or out of court on receivership, liquidation, bankruptcy, reorganization, arrangement, or assignment for the benefit of creditors) any claims against Franchisee or any Guarantor, (c) make advances for the purpose of performing any Obligations, or (d) assign the Franchise Agreement or the right to receive any sum payable under the Franchise Agreement, and the Guarantors each hereby jointly and severally waive notice of same.
Source: Item 23 — Receipts (FDD pages 114–399)
What This Means (2025 FDD)
According to the 2025 Cinnabon Franchise Disclosure Document, the Guarantor, under the Guaranty of Payment and Performance, is waiving several specific notices. These include notices of demand for payment of any debt or non-performance of obligations, protest notices, dishonor notices, and default notices to any party related to the guaranteed debt or nonperformance. The Guarantor also waives any other notices and legal or equitable defenses they might otherwise be entitled to.
This waiver means that Cinnabon Franchisor SPV LLC, the franchisor, is not obligated to inform the Guarantor about these specific events or demands before taking action to enforce the guaranty. This places a significant responsibility on the Guarantor, as they may be required to fulfill the obligations without prior warning or opportunity to contest the demand.
Furthermore, the franchisor has no present or future duty to disclose any information, financial or otherwise, concerning the franchisee, any guarantor, or any collateral securing the franchisee's obligations. The franchisor can also extend, modify, waive compliance, or release provisions of the Franchise Agreement without notifying the Guarantor, who still remains bound by the Guaranty. This could potentially alter the underlying agreement in ways that increase the Guarantor's risk without their knowledge or consent.
This arrangement is designed to protect Cinnabon's interests by streamlining the process of enforcing the guaranty. However, it also creates a situation where the Guarantor assumes substantial risk and must have a high degree of trust in the franchisee's ability to meet their obligations. Prospective franchisees should carefully consider the implications of this waiver and seek legal counsel to fully understand their obligations and potential liabilities under the Guaranty.