Under the Crave Sublease agreement, are the Guarantors jointly and severally guaranteeing the payment and performance of all rental and other sums due under the lease?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
| The undersigned, jointly and | | severally (hereinafter referred to individually and collectively as "Guarantor", whether one or | | more) hereby jointly and severally guarantee unto Sublessor the payment and performance of (i) all | | of the rental and other sums or charges which may ever become due and payable by Tenant under | | the Lease, including, without limitation, rental that becomes due and payable by reason of the | | exercise of any power to accelerate granted to Sublessor under the Sublease and any damages or | | other sums that become payable on account of any default by Sublessee under the Sublease, 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. | |
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, the Guarantor(s) are indeed jointly and severally guaranteeing the payment and performance of all rental and other sums due under the sublease agreement. This means that each guarantor is individually liable for the entire debt, as well as collectively liable. Crave can pursue any one guarantor for the full amount owed, regardless of the number of guarantors.
This arrangement protects Crave by ensuring they can recover the full amount due, even if one guarantor is unable to pay. However, it places a significant risk on the guarantors, as they could be responsible for the entire debt if the sublessee defaults and other guarantors are unable to contribute. This is a standard practice in franchising where a franchisor wants to ensure financial obligations are met.
Prospective Crave franchisees should carefully consider the implications of this joint and several guarantee. If multiple individuals or entities are acting as guarantors, each should understand that they could be held responsible for the entire financial obligation. It is advisable to seek legal counsel to fully understand the risks and responsibilities associated with this type of guarantee before signing the sublease agreement.