What is the relationship between the Guaranty of Performance and the Schedule B/C in the Coffee News franchise agreement?
Coffee_News Franchise · 2025 FDDAnswer 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, the Guaranty of Performance is directly related to Schedule B and/or Schedule C of the franchise agreement. Specifically, Exhibit A is attached to Schedule B and/or Schedule C and constitutes the Guaranty of Performance. This guaranty is executed by principal stockholders who own 5% or more of the franchisee/debtor entity, such as a corporation, partnership, or LLC.
The Guaranty of Performance ensures that these principal stockholders unconditionally guarantee the full performance of all covenants, conditions, and agreements outlined in Schedule B/C. This includes the obligations of the debtor (franchisee) and their successors or assigns. The guaranty extends to the Promissory Note contained within Schedule B/C, meaning the guarantors are also vouching for the franchisee's financial obligations.
The guaranty's validity remains unaffected even if Coffee News USA, Inc. grants indulgences to the debtor, asserts rights or remedies against the debtor, or if the debtor is relieved of obligations due to legal reasons, including bankruptcy proceedings. The guarantors waive any notices, protests, demands for acceptance of the Guaranty, suretyship defenses, and similar defenses. This arrangement provides Coffee News with an additional layer of security, ensuring that the franchise agreement's terms are upheld, even if the franchisee's business faces financial or legal challenges. Prospective franchisees should carefully review Schedule B/C and Exhibit A to understand the full scope of the obligations and potential liabilities.