What is the nature of the guarantee provided by the undersigned in the Cinnaholic Guaranty Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned further waives acceptance and notice of acceptance of the foregoing obligations of Franchisee, notice of demand for payment of any indebtedness or for performance of any obligations hereby guaranteed, and any right the undersigned may have to require that an action be brought against Franchisee or any other person as a condition to the liability of the undersigned.
This Guaranty is a guarantee of payment and performance not merely one of collection. 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.
Until all obligations of Franchisee 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 Franchisee 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 Franchise 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 Franchise Agreement may be amended, compromised, released or otherwise altered by Franchisor and the Franchisee and the undersigned do guarantee and promise to perform all of the obligations of the Franchisee under the Franchise Agreement as so amended, compromised, released or altered.
Upon notice from Franchisor that Franchisee has failed to pay monies due and owing to Franchisor under the Franchise 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 Franchise 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 Guaranty Agreement stipulates that the guarantor is providing a guarantee of payment and performance, not merely of collection. This means that the guarantor's liability is direct, immediate, and joint and several. The guarantor agrees to fulfill the obligations under the Franchise Agreement if the franchisee fails to do so, upon demand from Cinnaholic. This obligation is not contingent on Cinnaholic pursuing other remedies against the franchisee.
The guarantor's liability remains in effect throughout the term and any extensions or renewals of the Franchise Agreement, and continues until all obligations of the franchisee to Cinnaholic are satisfied. The guarantor's obligations are not released or modified by any circumstance, including bankruptcy or similar proceedings involving the franchisee. The guarantor also waives rights that may be conferred under state law as a guarantor or surety.
Furthermore, the Guaranty Agreement specifies that its terms can be amended or altered by Cinnaholic and the franchisee without requiring consent or notice to the guarantor, and the guarantor will continue to guarantee the franchisee's obligations under the altered agreement. Upon notice from Cinnaholic that the franchisee has failed to pay monies due, the guarantor agrees to cure the default within five business days. The obligations under the Guaranty Agreement survive the termination of the Franchise Agreement, and Cinnaholic's failure to enforce its rights under the Guaranty does not constitute a waiver of its ability to do so in the future.