factual

What is the significance of the phrase 'punctually pay and perform' in the Cinnaholic Development Agreement?

Cinnaholic Franchise · 2025 FDD

Answer from 2025 FDD Document

In consideration of, and as an inducement to, the execution by CINNAHOLIC FRANCHISING,
LLC ("Franchisor") of that certain CINNAHOLIC FRANCHISING, LLC Market Development
Agreement, dated , 20 (as the same from time to time may be amended or modified, the
"Development Agreement"), by and between ("Developer") and
Franchisor,
the
undersigned,
for
the
term
of
the
Development
Agreement,
and
thereafter
until
all
obligations
of Developer
to
Franchisor
have
been
satisfied,
jointly
and
severally,
do
hereby
personally,
absolutely, and
unconditionally guarantee that Developer shall punctually pay and perform each and every undertaking,
condition, and covenant set forth in the Development Agreement.

Source: Item 22 — CONTRACTS (FDD pages 61–62)

What This Means (2025 FDD)

According to the 2025 Cinnaholic Franchise Disclosure Document, the phrase 'punctually pay and perform' within the context of the Development Agreement signifies a guarantor's commitment to ensure the developer (franchisee) strictly adheres to all financial and operational obligations outlined in the agreement. This means the guarantor is personally and unconditionally guaranteeing that the franchisee will make all payments on time and fulfill all other duties and responsibilities as specified in the Development Agreement.

This guarantee is absolute and continues for the entire term of the Development Agreement, including any extensions or renewals, until all obligations of the developer to Cinnaholic are completely satisfied. The guarantor's liability is direct, immediate, and joint and several, meaning Cinnaholic can seek payment or performance directly from the guarantor without first pursuing the franchisee. The guarantor also waives rights to require Cinnaholic to take action against the developer before seeking recourse from the guarantor.

Furthermore, the guarantor's obligations are not diminished or affected by any extensions of time, credit, or other allowances Cinnaholic might grant to the developer. This includes accepting partial payments, compromising claims, releasing other guarantors, or consenting to assignment of the Development Agreement. These actions do not modify the guaranty, which remains in effect throughout the agreement's term. This clause is a strong protection for Cinnaholic, ensuring that it has recourse to the guarantor should the franchisee fail to meet their obligations under the Development Agreement.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.
All Cinnaholic 2025 FAQs Ask FDD Ninja