What specific agreement is the Guaranty of Performance related to for a Coffee News franchise?
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 related to Schedule B or C to the Coffee News Franchise Agreement. This agreement is executed by principal stockholders who own 5% or more of the Debtor (the Franchisee). The Guaranty of Performance ensures that the stockholders will guarantee the full performance of all covenants, conditions, and agreements outlined in Schedule B/C and the Promissory Note.
This means that if the Coffee News franchisee is a corporation, professional corporation, partnership, limited liability partnership, or limited liability company, the principal owners (those with 5% or more ownership) must personally guarantee the franchisee's obligations under the franchise agreement and any related promissory note. This provides Coffee News USA, Inc. with additional security, as it can pursue the personal assets of the owners if the franchisee fails to meet its financial or contractual obligations.
The guaranty remains valid even if Coffee News USA, Inc. grants indulgences to the franchisee, asserts its rights against the franchisee, or if the franchisee is relieved of its obligations due to legal reasons, including bankruptcy proceedings. The guarantors waive any rights to notice, protest, or demand related to the acceptance of the guaranty, as well as any suretyship defenses. This ensures that the guarantors remain fully liable for the franchisee's performance, regardless of any changes or challenges the franchisee may face.
For a prospective Coffee News franchisee, this means that if the business is structured as a corporation or similar entity, the principal owners will need to sign a personal guarantee, putting their personal assets at risk. It is important for these individuals to fully understand the obligations they are guaranteeing and the potential financial implications if the franchise does not perform as expected. Franchisees should seek legal and financial advice before signing such a guarantee.