Is the Guaranty and Assumption of Obligations for the Cream franchise revocable?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Guarantor consents and agrees that: (1) Guarantor's direct and immediate liability under this Guaranty will be joint and several, both with Franchise Owner and among other guarantors; (2) Guarantor will render any payment or performance required under the Agreement upon demand if Franchise Owner fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchise Owner or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which we may from time to time grant to Franchise Owner or to any other person, including the acceptance of any partial payment or performance or the compromise or release of any claims, or any amendment, waiver or restatement to any terms of the Agreement, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement; and (5) at our request, each Guarantor shall present updated financial information to us as reasonably necessary to demonstrate such Guarantor's ability to satisfy the financial obligations of Franchise Owner under the Agreement.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, the Guaranty and Assumption of Obligations that a guarantor provides to Cream is irrevocable during the term of the Franchise Agreement. This means that once the Guaranty is in place, the guarantor cannot cancel or withdraw from their obligations while the agreement is active.
The guarantor's liability remains in effect for the entire term of the agreement. The guarantor is responsible for ensuring the Franchise Owner adheres to all terms, including monetary and non-monetary obligations. This commitment extends to specific actions, adherence to non-competition clauses, maintaining confidentiality, and complying with transfer requirements outlined in the agreement.
This irrevocability provides Cream with a stable and continuing assurance that the franchisee's obligations will be met. It also means that the guarantor should be fully aware of the long-term commitment they are making, as they cannot simply revoke the guaranty if the franchisee's business faces difficulties or if their own financial situation changes. Prospective guarantors should carefully review the Franchise Agreement and seek legal counsel to understand the full extent of their obligations before signing the Guaranty and Assumption of Obligations.