Can the Guaranty be modified or amended by any changes to the Cream franchise agreement?
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.
Each Guarantor waives: (i) all rights to payments and claims for reimbursement or subrogation which any Guarantor may have against Franchise Owner arising as a result of the Guarantor's execution of and performance under this Guaranty; and (ii) acceptance and notice of acceptance by us of Guarantor's undertakings under this Guaranty, notice of demand for payment of any indebtedness or non-performance of any obligations hereby guaranteed, protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed, and any other notices to which he or she may be entitled.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, the Guaranty signed by the guarantor is not affected by any changes to the franchise agreement. The guarantor's liability remains intact even if Cream grants extensions of time or credit to the franchisee, accepts partial payments, compromises claims, or makes amendments or waivers to the franchise agreement terms. The Guaranty remains continuing and irrevocable during the term of the Agreement.
This means that as a prospective Cream franchisee, any modifications to your franchise agreement will not release your guarantor from their obligations. The guarantor's commitment is independent of any changes made to the agreement between you and Cream. This provides Cream with a consistent guarantee regardless of any negotiated changes to the franchise agreement.
Cream may also request updated financial information from the guarantor to ensure they can still meet the financial obligations under the franchise agreement. The guarantor also waives certain rights, including rights to payments and claims against the franchisee and notices related to payment demands or defaults. This further solidifies the guarantor's commitment and reduces potential challenges to their obligations.