Can the Guarantor's liability be diminished by any extension of time granted to the Developer by Degree Wellness?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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; (4) Guarantor's liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Franchisor may grant to Developer or to any other person, including the acceptance of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable during the term of the Development Agreement; (5) this undertaking will continue unchanged by the occurrence of any bankruptcy with respect to Developer or any assignee or successor of Developer or by any abandonment of the Development Agreement by a trustee of Developer; (6) neither the Guarantor's obligations to make payment or render performance in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Developer or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency; (7) Franchisor may proceed against Guarantor and Developer jointly and severally, or Franchisor may, at its option, proceed against Guarantor, without having commenced any action, or having obtained any judgment against Developer; and (8) Guarantor shall pay all reasonable attorneys' fees and all costs and other expenses incurred in any collection or attempt to collect amounts due pursuant to this undertaking or
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the Guarantor's liability will not be diminished if Degree Wellness grants the Developer an extension of time. The guaranty agreement specifies that the Guarantor's obligations remain in effect even if Degree Wellness provides extensions of time, credit, or other allowances to the Developer. This includes accepting partial payments or performance, or compromising or releasing claims.
This provision protects Degree Wellness by ensuring that the guaranty remains valid and enforceable regardless of any modifications or indulgences they may grant to the Developer. The Guarantor cannot claim that their obligations are reduced or eliminated due to such actions by Degree Wellness. This is a standard practice in franchising, as it provides the franchisor with a consistent and reliable form of security.
For a prospective Degree Wellness franchisee, this means that if they are acting as a Guarantor for a Developer, they should be aware that their liability is not contingent on the Developer's performance alone. Any extensions or modifications granted to the Developer by Degree Wellness will not affect the Guarantor's responsibility to fulfill the obligations under the Development Agreement. The Guarantor should carefully consider their financial capacity and willingness to assume this ongoing liability before entering into the guaranty agreement.