table_specific

In the Coffee News FDD, what schedule is the 'Debtor' stated to have executed?

Coffee_News Franchise · 2025 FDD

Answer from 2025 FDD Document

EXHIBIT A TO SCHEDULE B and/or SCHEDULE C

GUARANTY OF PERFORMANCE

(To Be Executed by Principal Stockholder(s) If Franchisee/Debtor is a Corporation, professional corporation, partnership, limited liability partnership, limited liability company)

FOR VALUE RECEIVED, and in consideration for, and as in inducement to Coffee News USA, Inc. as the Holder to make the foregoing Schedule B / C to Coffee News Franchise [name of the Franchisee/Debtor], as the Debtor Agreement with (the "Schedule B"), the undersigned, who each own 5% or more of the Debtor, unconditionally guarantee the full performance of all the covenants, conditions and agreements therein provided to be performed and observed by the Debtor and the Debtor's successors and assigns pursuant to the Schedule B / C and the Promissory Note contained therein, and expressly agrees that the validity of this Guaranty of Performance and the obligations of the guarantor(s) hereunder shall not be terminated, affected or impaired by reason of the granting by Holder of any indulgences to Debtor or by reason of the assertion by Holder against Debtor of any of the rights or remedies reserved to Holder pursuant to the provisions of the Schedule B / C or by the relief of Debtor from any of Debtor's obligations under said Schedule B / C by operation of law or otherwise (including without implied limitation, the rejection or assignment of the Schedule B / C and/or the Promissory Note) in connection with proceedings under bankruptcy laws now or hereafter enacted), irrespective of Holder's consent or other action or inaction with respect to such relief, the undersigned hereby waiving notice, protest, demand of the acceptance of this Guaranty all suretyship defenses and all defenses in the nature thereof.

Source: Item 23 — Receipts (FDD pages 36–118)

What This Means (2025 FDD)

According to the 2025 Coffee News Franchise Disclosure Document, if the franchisee/debtor is a corporation, professional corporation, partnership, limited liability partnership, or limited liability company, they are required to execute Exhibit A to Schedule B and/or Schedule C, which is a Guaranty of Performance. This guaranty ensures that the principal stockholders, owning 5% or more of the debtor, unconditionally guarantee the full performance of all covenants, conditions, and agreements outlined in Schedule B / C and the Promissory Note.

This means that the personal assets of the stockholders could be at risk if the Coffee News franchisee's business fails to meet its financial obligations. The guaranty remains valid even if Coffee News USA grants indulgences to the debtor or if the debtor is relieved of obligations due to legal reasons, including bankruptcy proceedings. The guarantor waives any notice, protest, or demand related to the acceptance of the Guaranty, as well as all suretyship defenses.

In essence, this requirement provides Coffee News USA with an additional layer of financial security, ensuring that there are individuals with a vested interest in the franchisee's success who are willing to personally guarantee the franchisee's obligations. Prospective franchisees should carefully consider the implications of this personal guarantee and seek legal counsel to fully understand their obligations and potential liabilities before signing the franchise 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.