Under the Cinnaholic Guaranty Agreement, what does 'absolutely' guarantee?
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 Guaranty Agreement stipulates that the undersigned (guarantor) personally, absolutely, and unconditionally guarantees that the franchisee will punctually pay and perform each and every undertaking, condition, and covenant set forth in the Franchise Agreement.
In simpler terms, this means that if a Cinnaholic franchisee fails to meet their financial or operational obligations as outlined in the Franchise Agreement, the guarantor is personally liable for ensuring those obligations are fulfilled. This could include covering unpaid fees, rectifying breaches of contract, or otherwise ensuring the franchisee's compliance.
The use of the words 'absolutely' and 'unconditionally' emphasizes the comprehensive and unwavering nature of the guarantee. The guarantor cannot claim ignorance, lack of control, or changed circumstances as a defense against their obligations under the Guaranty Agreement. This is a significant commitment and should be carefully considered before signing the agreement.
Prospective Cinnaholic franchisees should seek legal counsel to fully understand the implications of the Guaranty Agreement and the extent of their personal liability. It is crucial to assess the financial risks associated with the franchise and the guarantor's capacity to cover potential shortfalls or breaches of contract.