What specific 'covenants, conditions and agreements' are guaranteed by the Guaranty of Performance for a Coffee News franchise?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
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 executed by principal stockholders who own 5% or more of the Debtor (the franchisee). This guaranty ensures the full performance of all covenants, conditions, and agreements outlined in Schedule B or C of the Coffee News Franchise Agreement and the Promissory Note contained within. The guarantor(s) commit to unconditionally guarantee the franchisee's performance and adherence to these terms.
This guaranty remains valid and unaffected even if Coffee News USA, Inc., as the Holder, grants indulgences to the franchisee or asserts its rights and remedies under Schedule B/C. It also persists if the franchisee is relieved of obligations due to legal operations, including bankruptcy proceedings. The guarantor(s) waive any notice, protest, or demand related to the acceptance of the Guaranty, as well as all suretyship defenses.
In practical terms, this means that the personal assets of the stockholders are at risk if the Coffee News franchise fails to meet its obligations. This is a significant commitment, as it extends beyond the assets of the franchise itself. Prospective franchisees should carefully consider the implications of this requirement and ensure that all principal stockholders are fully aware of and willing to accept this responsibility.
This type of guarantee is common in franchising, particularly when the franchisee is a corporate entity. It provides the franchisor with an additional layer of security, ensuring that there are individuals with a vested interest in the success and compliance of the franchise. Franchisees should seek legal counsel to fully understand the scope and implications of the Guaranty of Performance before signing the agreement.