What obligations of the Franchisee do the Guarantors guarantee to City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 1. Guaranty. Spousal Guarantor hereby unconditionally guarantees the punctual payment when due, whether at stated maturity, by acceleration, or otherwise, of all obligations of Franchisee now or hereafter existing under the Franchise Agreement, whether for fees, expenses, interest, or otherwise (collectively, "Obligations"), and agrees to pay any and all expenses (including attorney fees and expenses) incurred by CITY WIDE in enforcing any rights under this Guaranty, except to the extent limited by Section 5 below.
SECTION 2. Guaranty Absolute. Spousal Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Franchise Agreement, regardless of any law, regulation, or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of CITY WIDE with respect thereto. The liability of Spousal Guarantor under this Guaranty is absolute and unconditional irrespective of:
- (i) Any lack of validity or enforceability of the Franchise Agreement or any other agreement or instrument relating thereto;
- (ii) Any change in the time, manner, or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of, or any consent to departure from, the Franchise Agreement;
- (iii) Any exchange, release, or non-perfection of any collateral, or any release or amendment or waiver of, or consent to departure from, any other guaranty for all or any of the Obligations; or
- (iv) Any other circumstance which might otherwise constitute a defense available to, or a discharge of, Franchisee or Spousal Guarantor.
This Guaranty will continue to be effective, or be reinstated, if at any time any payment of the Obligations is rescinded or must otherwise be returned by CITY WIDE upon the insolvency, bankruptcy, or reorganization of Franchisee or otherwise, all as though such payment had not been made.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the Guarantor (typically a spouse) unconditionally guarantees the franchisee's obligations to City Wide under the Franchise Agreement. This guarantee covers all obligations, whether they are for fees, expenses, interest, or any other financial responsibilities. The guarantor also agrees to cover any expenses City Wide incurs while enforcing its rights under the guaranty, potentially including attorney fees. This obligation extends to all existing and future debts under the Franchise Agreement.
The guarantor's obligation is absolute and unconditional, meaning it remains in effect regardless of various circumstances. These circumstances include the validity or enforceability of the Franchise Agreement, changes to payment terms, release of collateral, or any other situation that might typically provide a defense for the franchisee or guarantor. This ensures that City Wide is protected from potential losses due to the franchisee's inability to meet their financial obligations.
The guaranty remains effective even if payments made by the franchisee are later rescinded or returned due to insolvency, bankruptcy, or reorganization. In such cases, the guaranty is reinstated as if the initial payment never occurred, further securing City Wide's financial interests. The guarantor also waives certain rights, such as the right to receive notices or require City Wide to take action against the franchisee before pursuing the guarantor. This waiver streamlines the process for City Wide to seek fulfillment of the franchisee's obligations from the guarantor.