What does the Guarantor guarantee to Crave under the Personal Guaranty of Lease?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
ase, and (ii) | | | all of the other obligations, liabilities and duties of Sublessee under the Sublease (the rental, other | | | sums and charges and other obligations, liabilities and duties described in the foregoing clauses (i) | | | and (ii) being hereinafter collectively referred to as the "Obligations"). For the purposes hereof, the | | | term "Sublessee" shall include any assignee of Sublessee, | and the term "Sublease" shall include any | | amendment of the Sublease effected by Sublessor and Sublessee, with or | without the consent or | | knowledge of Guarantor. | | Sublessor shall not be required, before invoking the benefits of this Guaranty, to institute suit against or exhaust its remedies with respect to Sublessee or any other person liable for the Obligations or to enforce its rights with respect to any security which shall have ever been given to secure the payment and performance of the Obligations; and the obligations of Guarantor hereunder shall not be released or impaired in any way by any action for the collection or enforcement of the Obligations, or any failure of Sublessor to give Guarantor any notice of any kind under any circumstances whatsoever with respect to or in connection with the Obligations. Suit may be brought and maintained against Guarantor without the joinder of Sublessee or any other person, and in the event that there is more than one guarantor of the Obligations, Sublessor may (i) bring suit against all guarantors jointly and severally or against any one or more of them, (ii) compromise or settle with any one or more of such guarantors for such consideration as Sublessor may deem proper, and (iii) release one or more of such guarantors from liability without impairing the liability of the guarantors not so released; and no action brought by Sublessor against any guarantor of the Obligations shall impair the right of Sublessor to bring suit against any remaining guarantor or guarantors, including Guarantor hereunder.
The obligations of Guarantor shall be irrevocable and unconditional, irrespective of the genuineness, validity, regularity or enforceability of the Lease or any security given for the Obligations or any other circumstances which might otherwise constitute a legal or equitable discharge of a surety or guarantor, and Guarantor waives the benefit of all principles or provisions of Law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty, and agrees that the obligations of Guarantor shall not be affected by any circumstances, whether or not referred to in this Guaranty which might otherwise constitute a legal or equitable discharge of a surety or a guarantor. Specifically, Guarantor waives the benefits of any right of discharge and any
other rights of sureties and guarantors under applicable law. Without limiting the generality of the foregoing, Guarantor agrees that Sublessor may, in its sole and absolute discretion, without notice to or consent by Guarantor, and without in any way releasing or impairing any liability or obligation of Guarantor hereunder, (i) waive compliance by Sublessee with any of its Obligations or covenants under the Lease or waive any default thereunder, or grant any other indulgence with respect to the Lease, (ii) modify, amend or change any provision of the Sublease, (iii) grant extensions or renewals of the Sublease or the Obligations, or effect any release, compromise or settlement in connection therewith, including any release of the liability of Sublessee or any guarantor or other person liable on the Obligations or any part thereof, (iv) transfer its interest in the premises covered by the Sublessor its rights under this Guaranty, (v) consent to the assignment by Sublessee of its rights under the Lease, and (vi) deal in all respects with Sublessee and the Obligations as if this Guaranty were not in effect. Guarantor further waives (i) notices of acceptance of this Guaranty, (ii) notices to Guarantor of any kind in any circumstances whatsoever, including without limitation, notice of dishonor and notice of any default by Sublessor under the Sublease and all waivers or indulgences granted by Sublessor to Sublessee under the Sublease, and (iii) diligence, presentment and suit on the part of Sublessor in the enforcement of any of the Obligations.
Notwithstanding anything contained herein to the contrary, this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any part thereof, of any or all of the Obligation is rescinded or must otherwise be restored or returned by Landlord upon the insolvency, bankruptcy or reorganization of Sublessee, any other guarantor of the Sublease or otherwise, all as though such payment had not been made. Notwithstanding any modification, discharge or extension of the Obligation or any amendment, modification, stay or cure of Sublessor's rights which may occur in any bankruptcy or reorganization case or proceeding concerning Sublessor, whether permanent or temporary, and whether assented to by Sublessor, Guarantor hereby agrees that Guarantor shall be obligated to pay or perform the Obligation and the terms of this Guaranty in effect on the date hereof. Guarantor understands and acknowledges that by virtue of this Guaranty, Guarantor has specifically assumed any and all risks of a bankruptcy or reorganization case or proceeding with respect to Sublessee or any other guarantor. As an example, and not in any way of limitation, a subsequent modification of the Obligation in any reorganization case concerning Sublessee or any guarantor shall not affect the obligation of Guarantor (other than if Guarantor is then the subject of any such reorganization case) to pay or perform the Obligation in accordance with its original terms.
This Guaranty shall be enforceable despite any exculpation from liability granted to Sublessee under the Sublease, with the same force and effect as if no such exculpation from liability had been granted to Sublessee.
Guarantor agrees to pay the reasonable attorney's fees, and all other costs and expenses incurred by Sublessor in order to enforce its rights under this Guaranty.
In the event any payment by Sublessee to Sublessor is held to constitute a preference under the bankruptcy laws, or if for any other reason Sublessor is required to refund such payment or pay the amount thereof to any other party, such payment by Sublessee to Landlord shall not constitute a release of Guarantor from any liability hereunder, but Guarantor agrees to pay such amount to Sublessor upon demand.
Until the Obligations have been paid in full, Guarantor shall not have any right of subrogation unless such right is expressly granted in writing by Sublessor. Any indebtedness of Sublessee held by Guarantor is hereby subordinated to this Guaranty, and any such indebtedness of sublessee to Guarantor, if Sublessor so requests, shall be collected, enforced and received by Guarantor as trustee for Landlord and shall be paid over to Sublessor in order to satisfy the Obligations guaranteed hereunder.
Sublessor in its sole discretion may apply all payments by it from sublessee, Guarantor or any other guarantor under any other instrument, or realized by it from any security in such manner and order or priority as sublessor sees fit, to any of the Obligations of Sublessee, whether or not any of the Obligations to which any payment is applied are due at the time of such application.
If this Guaranty is signed by more than one person, then all the obligations of Guarantor arising hereunder shall be jointly and severally binding on each of the undersigned, and their respective heirs, executors, administrators, successors and assigns. The word "person" as used herein includes natural persons and entities of all kinds.
This Guaranty shall be construed in accordance with and governed by the laws of the State of jurisdiction of the Lease.
This Guaranty shall be binding upon Guarantor and the heirs, executors, administrators, successors and assigns of each of the persons comprising Guarantor and shall inure to the benefit of Sublessor and its successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Guarantor's obligations under the Personal Guaranty of Lease are extensive and designed to ensure the lease obligations are met, even under challenging circumstances. The Guarantor's obligations are irrevocable and unconditional, regardless of the validity or enforceability of the lease or any security given for the obligations. This means the Guarantor cannot claim release from their obligations based on legal or equitable principles that might typically discharge a surety or guarantor. The Guarantor also assumes all risks associated with bankruptcy or reorganization proceedings involving the sublessee or any other guarantor.
Specifically, the Guarantor waives several rights that could otherwise protect them. They waive the benefit of any conflicting laws and agree that their obligations will not be affected by circumstances that might typically discharge a guarantor. The Guarantor also waives notices of acceptance of the guaranty, notices of any kind, including dishonor or default by the sublessor, and any requirement for the sublessor to exercise diligence or presentment in enforcing the obligations. This means Crave (as sublessor) does not have to first pursue the sublessee or any other liable party before seeking recourse from the Guarantor.
The Guarantor also agrees that Crave can take various actions without affecting the Guarantor's obligations, such as waiving compliance by the sublessee, modifying the sublease, granting extensions or renewals, transferring its interest in the premises, consenting to assignment by the sublessee, and dealing with the sublessee as if the guaranty were not in effect. Furthermore, the Guarantor's right to subrogation is limited, and any debts the sublessee owes to the Guarantor are subordinated to the guaranty. Payments received can be applied by Crave in any manner it sees fit.
In practical terms, a prospective Crave franchisee acting as a Guarantor faces significant personal financial risk. The Guarantor's personal assets are at stake should the franchisee (sublessee) default on the lease. The waivers included in the guaranty severely limit the Guarantor's ability to defend against claims by Crave. The franchisee should carefully consider these factors and seek legal counsel before signing a Personal Guaranty of Lease, understanding that this commitment extends to covering attorney's fees and costs incurred by Crave in enforcing its rights under the Guaranty.