Is the guaranty provided in the Cinnaholic Guaranty Agreement conditional or unconditional?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, the obligations of the guarantor under the Guaranty Agreement are designed to remain in full effect until all the developer's obligations to Cinnaholic are satisfied. This obligation remains regardless of any circumstance or condition, even without the guarantor's knowledge. This includes situations like bankruptcy, insolvency, or similar proceedings involving the developer.
The guarantor specifically waives any rights they might have as a guarantor or surety under state law. Cinnaholic's remedies under the Development Agreement are cumulative and nonexclusive, meaning Cinnaholic can pursue any and all available legal options. The agreement can be altered by Cinnaholic and the developer without the guarantor's consent or notification, and the guarantor is still responsible for the developer's obligations under the altered agreement.
Upon receiving notice from Cinnaholic that the developer has failed to pay monies due, the guarantor must cure the default within five business days. The obligations of the guarantor survive the termination of the Development Agreement. Cinnaholic's failure to enforce its rights under the Guaranty Agreement does not waive its ability to do so in the future. This indicates that the guaranty is comprehensive and designed to protect Cinnaholic's interests throughout the term of the agreement.