Can the guarantor's liability under the Cinnaholic Guaranty Agreement be diminished by extensions of time granted to the Franchisee?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned further consents and agrees that its liability under this Guaranty shall be direct and immediate and joint and several; that the undersigned shall render any payment or performance required under the Franchise Agreement upon demand if Franchisee fails or refuses punctually to do so; that such liability shall not be contingent or conditioned upon the pursuit of any remedies against Franchisee or any other person; and that such liability shall not be diminished, relieved or otherwise affected by the extension of time, credit or any other indulgence which Franchisor, its affiliates, successors or assigns may, from time to time, grant to Franchisee or to any other person, including, without limitation, the acceptance of any partial payment or performance, or the compromise or release of any claims, or the release of any one or more of the undersigned hereunder, or the consent to assignment of the Franchise Agreement or any interest in Franchisee, none of which shall in any way modify or amend this Guaranty, which shall be continuing and irrevocable throughout the term of the Franchise Agreement and any extension or renewal thereof and thereafter until all obligations of Franchisee to Franchisor have been satisfied.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the liability of a guarantor under the Guaranty Agreement will not be diminished if Cinnaholic grants the franchisee an extension of time. The guarantor's obligations remain direct, immediate, and joint and several. This means that each guarantor is fully responsible for the franchisee's obligations.
The guarantor's liability is not contingent on Cinnaholic pursuing remedies against the franchisee first. The guarantor must fulfill the obligations under the Franchise Agreement immediately upon demand if the franchisee fails to do so. This includes payment or performance required under the agreement.
Furthermore, the guarantor's liability will not be affected by any extensions of time, credit, or other indulgences that Cinnaholic may grant to the franchisee. This also includes accepting partial payments or performance, compromising claims, releasing one or more guarantors, or consenting to assignment of the Franchise Agreement. The Guaranty remains continuing and irrevocable throughout the term of the Franchise Agreement, including any extensions or renewals, until all obligations of the franchisee to Cinnaholic are satisfied.