If a Guarantor dies, what happens to the obligations under the Crowne Plaza Guaranty?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guaranty shall in all respects be a continuing and absolute guaranty, remaining in full force and effect until all of the obligations have been satisfied in full. No notice of discontinuance or revocation shall affect any of the obligations of Guarantor hereunder. Guarantor's obligations under this Guaranty are independent of Licensee's obligations, and a separate action may be brought against Guarantor to enforce this Guaranty whether or not Licensee is joined in such action. Upon the death of any individual Guarantor, the estate of such Guarantor will be bound by this Guaranty but only for defaults and obligations hereunder existing at the time of death, and the obligations of any other Guarantors will continue in full force and effect.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to the 2025 Crowne Plaza Franchise Disclosure Document, the death of a guarantor does not automatically terminate the guaranty. The estate of the deceased guarantor remains bound by the Guaranty, but only for defaults and obligations that existed at the time of death. This means the estate is responsible for any outstanding debts or unfulfilled obligations of the licensee that were present when the guarantor passed away.
The obligations of any other guarantors, if there are multiple, will continue in full force and effect. This is a standard provision in franchise agreements with multiple guarantors, ensuring that the franchisor's financial security is maintained even if one guarantor is no longer able to fulfill their obligations. Crowne Plaza may also require replacement guarantees to ensure they have the same level of protection they originally bargained for.
This clause protects Crowne Plaza by ensuring that the obligations under the license agreement are met even if a guarantor dies. For a prospective franchisee, this means understanding that if they act as a guarantor, their estate will be liable for any existing defaults at the time of their death. If there are other guarantors, they will remain fully responsible for the obligations under the Guaranty.