Does the Guaranty of Performance for a Coffee News franchise cover extensions of the Schedule B/C?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the Guaranty of Performance applies to Schedule B/C. Specifically, the guarantor, owning 5% or more of the Debtor (the franchisee), unconditionally guarantees the full performance of all covenants, conditions, and agreements outlined in Schedule B/C and the associated Promissory Note. This guarantee extends to the Debtor's successors and assigns.
The Guaranty of Performance's validity and the guarantor's obligations remain intact even if Coffee News USA, Inc. grants indulgences to the Debtor or exercises its rights and remedies under Schedule B/C. It also covers situations where 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 suretyship defenses.
However, the document does not explicitly state whether the Guaranty of Performance extends to extensions of Schedule B/C. A prospective Coffee News franchisee should seek clarification from the franchisor regarding whether the Guaranty of Performance covers any extensions or modifications to the original Schedule B/C agreement.