What is the effect of the undersigned 'unconditionally' guaranteeing the Development Agreement in the Cinnaholic Guaranty Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
t Agreement or any interest in Developer, none of which shall in any way modify or amend this Guaranty, which shall be continuing and irrevocable throughout the term of the Development Agreement and any extension or renewal thereof and thereafter until all obligations of Developer to Franchisor have been satisfied.
Until all obligations of Developer to Franchisor have been satisfied, the obligations of the undersigned under this Guaranty shall remain in full force and effect without regard to, and shall not be released, discharged or in any way modified or affected by, any circumstance or condition (whether or not the undersigned shall have any knowledge or notice thereof), including, without limitation, any bankruptcy, insolvency, reorganization, composition, liquidation or similar proceeding, with respect to Developer or its properties or creditors, or any action taken by any trustee or receiver or by any court in any such proceeding. Each of the undersigned specifically waives any rights that may be conferred upon the undersigned as a guarantor or surety under the applicable law of any state. The remedies provided herein shall be nonexclusive and cumulative of all other rights, powers and remedies provided under the Development Agreement or by law or in equity.
The undersigned hereby agree that without the consent of or notice to any of the undersigned and without affecting any of the obligations of the undersigned hereunder, any term, covenant or condition of the Development Agreement may be amended, compromised, released or otherwise altered by Franchisor and the Developer and the undersigned do guarantee and promise to perform all of the obligations of the Developer under the Development Agreement as so amended, compromised, released or altered.
Upon notice from Franchisor that Developer has failed to pay monies due and owing to Franchisor under the Development Agreement, any and each of the undersigned agree to cure the monetary default within five business days from such notice. Upon the death of an undersigned, the estate of such undersigned shall be bound by this Guaranty but only for defaults and obligations hereunder existing at the time of death. The obligations of the surviving undersigned shall continue in full force and effect.
The undersigned expressly acknowledge that the obligations hereunder survive the termination of the Development Agreement.
Franchisor's failure to enforce all or any portion of its rights under this Guaranty shall not constitute a waiver of its ability to do so at any point in the future.
No delay or failure of Franchisor in the exercise of any right, power, or remedy shall operate as a waiver thereof, and no partial exercise by Franchisor shall preclude any further exercise thereof or the exercise of any other right, power or remedy.
This Guaranty shall be governed by and construed in accordance with the internal laws of the State of Georgia without recourse to Georgia (or any other) choice of law or conflicts of law principles. If, however, any provision of this Guaranty would not be enforceable under the laws of Georgia, and if the business franchised under the Development Agreement is located outside of Georgia and the provision would be enforceable under the laws of the state in which the franchised business is located, then the provision (and only that provision) will be interpreted and construed under the laws of that state. Nothing in this Guaranty is intended to invoke the application of any franchise, business opportunity, antitrust, "implied covenant", unfair competition, fiduciary or other doctrine of law of the State of Georgia or any other state, which would not otherwise apply. Any litigation initiated under this Guaranty shall be instituted exclusively at Franchisor's discretion in the most immediate state judicial district and court encompassing Franchisor's headquarters and having subject matter jurisdiction thereof or the United States District Court encompassing Franchisor's headquarters. Each of the undersigned expressly agree that the undersigned is subject to the jurisdiction and venue of those courts for purposes of such litigation.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if an individual unconditionally guarantees the Development Agreement, they are bound to fulfill the developer's obligations to Cinnaholic without any conditions. This means the guarantor's obligations remain in full effect until all the developer's duties are satisfied, irrespective of circumstances like bankruptcy or similar proceedings involving the developer. The guarantor also waives any rights typically afforded to them under state laws.
Specifically, the guarantor agrees that Cinnaholic can alter the Development Agreement's terms without notifying or seeking consent from the guarantor, and the guarantor remains responsible for fulfilling the developer's obligations under the altered agreement. If the developer fails to pay monies owed to Cinnaholic, the guarantor must cure the default within five business days of receiving notice from Cinnaholic. The guarantor's obligations also extend beyond the termination of the Development Agreement.
Furthermore, the guarantor waives the right to demand that Cinnaholic first pursue action against the developer before seeking fulfillment from the guarantor. The guarantor's liability is direct, immediate, and joint and several, meaning Cinnaholic can seek payment or performance directly from the guarantor without having to pursue remedies against the developer first. This guarantee remains effective throughout the term of the Development Agreement, including any extensions or renewals, until all obligations are met.