Are suretyship defenses waived by the guarantor of a Coffee News franchise?
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 guarantor of a Coffee News franchise waives suretyship defenses. Specifically, the Guaranty of Performance states that the guarantor(s), who each own 5% or more of the Debtor (the franchisee), unconditionally guarantee the full performance of all obligations of the franchisee.
The guarantor(s) expressly agree that the validity of the Guaranty of Performance and their obligations will not be affected or impaired if Coffee News USA, Inc. grants any indulgences to the franchisee or asserts any rights or remedies against the franchisee. This also applies if the franchisee is relieved of any obligations due to operation of law, including bankruptcy proceedings.
Furthermore, the guarantor(s) waive notice, protest, demand for acceptance of the Guaranty, all suretyship defenses, and all defenses in the nature thereof. This means that the guarantor cannot use typical defenses a surety might have, such as claiming they were not notified of the franchisee's default or that Coffee News altered the terms of the agreement without their consent. By waiving these defenses, the guarantor strengthens their commitment to ensuring the franchisee fulfills their obligations under the Franchise Agreement and Promissory Note.
This waiver is a significant protection for Coffee News, as it ensures that the guarantor remains fully liable for the franchisee's performance, regardless of any changes or difficulties the franchisee may encounter. Prospective franchisees should carefully review this Guaranty of Performance and understand the implications of waiving suretyship defenses before signing the Franchise Agreement.