What is the effect of the Original Guaranty after the transfer of a Clean Your Dirty Face franchise?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
The Original Guaranty shall remain in force and effect and shall serve as a guaranty of the Surviving Obligations, and Transferor Guarantors acknowledge and agree that Franchisor may seek any available remedies against them for the failure of any Transferor Party to comply with any Surviving Obligations.
Source: Item 23 — RECEIPTS (FDD pages 54–186)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the Original Guaranty remains in effect after a franchise transfer. Specifically, it continues to guarantee what are termed the "Surviving Obligations." These obligations include adherence to termination restrictive covenants, indemnification, dispute resolution, non-disparagement, confidentiality provisions, and the obligation to cease using any proprietary trademarks.
Furthermore, the Original Guaranty covers any obligations that arose before the transfer date, such as unpaid amounts owed to Clean Your Dirty Face. It also extends to any failures, improper performance, breaches, defaults, or violations of the original franchise agreement by the transferring party. The guaranty also covers the obligations of the transferring parties under the consent to transfer agreement itself.
In practical terms, this means that even after a Clean Your Dirty Face franchise is sold, the original guarantors remain liable for specific obligations and potential liabilities associated with the franchise's operation up to the point of transfer. Clean Your Dirty Face can pursue legal remedies against these guarantors if the transferring party fails to meet any of these surviving obligations. This provision protects Clean Your Dirty Face from potential losses or damages resulting from the previous franchisee's actions or inactions.