What is each Guarantor unconditionally agreeing to in relation to the Development Agreement with Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
to in Section 1 of the 2. Development Schedule. The Development Schedule referred to in Section 5 of the Development Agreement is as follows: Expiration of Development Period (each, a "Development Period") No. of New Studios Opened Within Development Period Cumulative No. of Studios that Must Be Open and Operating 12 Months from Effective Date 1 1 Months 13 through 24 1 2 of the Development Agreement Months 24 1 3 through 36 of the Development Agreement DEVELOPER FRANCHISE, LLC DEGREE WELLNESS NAME, TITLE
ATTACHMENT B TO DEVELOPMENT AGREEMENT
PERSONAL GUARANTY AND UNDERTAKING
THIS PERSONAL GUARANTY AND UNDERTAKING is given this date of
| , by each of the undersigned below (each a "Guarantor"). |
|---|
| In consideration of, and as an inducement to, the execution of that certain Development Agreement |
| Franchise, LLC |
| of even date (the "Development Agreement") by Degree Wellness |
| (the "Franchisor"), |
| and with ("Developer"), each Guarantor hereby personally and unconditionally (a) |
guarantees to Franchisor, and its successor and assigns, for the term of the Development Agreement and as provided in the Development Agreement, that Developer shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Development Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Development Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, as though each were the Developer under the Development Agreement.
Each Guarantor hereby waives: (1) acceptance and notice of acceptance by Franchisor of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations guaranteed; (4) any right Guarantor may have to require that an action be brought against Developer or any other person as a condition of liability; and (5) the defense of the statute of limitations in any action hereunder or for the collection of any indebtedness or the performance of any obligation hereby guaranteed.
Each Guarantor hereby consents and agrees that: (1) such Guarantor's undertaking shall be direct, immediate and independent of the liability of, and shall be joint and several with, Developer and any other Guarantors; (2) Guarantor shall render any payment or performance required under the Development Agreement upon demand if Developer fails or refuses punctually to do so; (3) Guarantor's liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Developer or any other person;
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, a Guarantor to the Development Agreement is personally and unconditionally agreeing to several key obligations. These include the Guarantor's undertaking being direct, immediate, and independent of the Developer's liability, as well as being jointly and severally liable with the Developer and any other Guarantors. This means that Degree Wellness can pursue any Guarantor directly for the full amount owed, regardless of whether they pursue the Developer first.
The Guarantor must render any payment or performance required under the Development Agreement upon demand if the Developer fails to do so. The Guarantor's liability is not contingent upon Degree Wellness pursuing remedies against the Developer or any other person. Furthermore, the Guarantor's liability will not be affected by any extensions of time, credit, or other allowances that Degree Wellness may grant to the Developer, including accepting partial payments or releasing claims. This ensures that the guaranty remains in effect throughout the term of the Development Agreement, regardless of any changes in circumstances.
The Guarantor's obligations remain even in the event of bankruptcy of the Developer or any assignee. The obligations to make payments or render performance will not be limited by any impairment or modification of the Developer's liability due to bankruptcy laws or court decisions. Degree Wellness can proceed against the Guarantor and Developer jointly or separately, at its option, without first taking action against the Developer. Finally, the Guarantor is responsible for paying all reasonable attorneys' fees and costs associated with collecting amounts due or enforcing the guaranty.
In practical terms, this means that anyone acting as a Guarantor for a Degree Wellness Development Agreement is taking on significant financial risk. They are essentially promising to cover all of the Developer's obligations under the agreement, regardless of the circumstances. Prospective franchisees should carefully consider the implications of acting as a Guarantor and seek legal advice before doing so.