Under the Cream franchise agreement, what does the Guarantor consent to regarding their liability?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
ually pay and perform each and every undertaking, agreement, and covenant set forth in the Agreement and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including the non-competition, confidentiality, and transfer requirements.
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 the 2025 FDD, the Guarantor's liability under the Cream franchise agreement is direct, immediate, joint, and several with the Franchise Owner and other guarantors. This means that Cream can pursue any or all guarantors for the full amount of the obligation, regardless of whether Cream has pursued the Franchise Owner first. The Guarantor must make any payment or performance required under the agreement immediately upon demand if the Franchise Owner fails to do so.
The Guarantor's liability is not contingent upon Cream pursuing remedies against the Franchise Owner or any other person. Furthermore, the liability will not be affected by any extensions of time, credit, or other allowances that Cream may grant to the Franchise Owner. This includes accepting partial payments, compromising claims, or amending the agreement's terms. The guaranty is continuing and irrevocable during the term of the agreement.
The Guarantor also waives all rights to payments and claims for reimbursement or subrogation against the Franchise Owner arising from the guaranty. They also waive the right to receive notice of acceptance of the guaranty, demand for payment, or notice of default. Additionally, the Guarantor may be required to provide updated financial information to demonstrate their ability to meet the Franchise Owner's financial obligations under the agreement. If the Guarantor is a business entity, retirement or investment account, or trust, they agree that no dividends or distributions may be made to its owners, accountholders, or beneficiaries if the Franchise Owner is delinquent in payment.