What does each Guarantor unconditionally guarantee to Degree Wellness under the Personal Guaranty and Undertaking?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
| , 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.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, each Guarantor provides an unconditional guarantee to Degree Wellness, ensuring that the Developer (franchisee) punctually pays and performs all obligations, agreements, and covenants outlined in the Development Agreement. This guarantee extends for the term specified in the Development Agreement.
Furthermore, the Guarantor agrees to be personally bound by and liable for any breaches of the Development Agreement, encompassing both monetary obligations and specific actions required or prohibited. This liability is equivalent to that of the Developer under the Development Agreement, meaning the Guarantor is fully responsible as if they were the franchisee themselves.
The Guarantor also waives several rights, including the need for Degree Wellness to notify them of acceptance, demand payment, or provide notice of default. They also waive the right to require Degree Wellness to first pursue action against the Developer or any other person before seeking recourse from the Guarantor. Additionally, the Guarantor waives the defense of the statute of limitations in any action related to the guarantee.
In essence, the Personal Guaranty and Undertaking ensures that Degree Wellness has recourse beyond the franchisee in the event of non-payment or non-performance, providing a significant layer of financial and operational security for the franchisor. This is a common practice in franchising, as it mitigates the risk associated with franchisees who may have limited business experience or financial resources.