What is the significance of the term 'jointly' in the Cinnaholic Guaranty Agreement?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
| ("Franchisor") of that certain Cinnaholic | Franchise Agreement, | dated , 20 (as the same |
|---|---|---|
| from time to time may be amended, | modified, extended or renewed, | the "Franchise Agreement"), by and |
| between | ("Franchisee") | the |
| and | undersigned, for the | |
| Franchisor, | term of the | |
| Franchise Agreement and any | extension or renewal thereof, and | thereafter until all obligations of Franchisee to Franchisor have been satisfied, jointly and severally, do hereby personally, absolutely, and unconditionally guarantee that Franchisee shall punctually pay and perform each and every undertaking, |
| condition, and covenant set forth in the Franchise Agreement. |
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the term 'jointly' within the Guaranty Agreement means that if there are multiple guarantors, each guarantor shares responsibility for ensuring the franchisee fulfills their obligations. This implies that Cinnaholic Franchising, LLC can pursue all guarantors together in a single action to enforce the agreement.
In practical terms, if a Cinnaholic franchisee defaults on their obligations, such as payments or adherence to operational standards, all guarantors are collectively responsible for rectifying the breach. The franchisor does not need to pursue each guarantor separately; they can seek full compensation or compliance from all of them simultaneously. This provides Cinnaholic with a streamlined approach to enforcing the agreement and recovering any losses.
For a prospective Cinnaholic franchisee, this highlights the importance of carefully considering who acts as a guarantor. Each guarantor should fully understand the scope of their potential liability, as they could be held responsible for the entire debt or obligation, regardless of the contributions or actions of other guarantors. It is advisable for guarantors to seek independent legal counsel to fully grasp the implications of the Guaranty Agreement before signing.