Is Deka Lash liable for any debts or obligations incurred by a Deka Lash franchisee?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
Agreement.** All other aspects of the parties' relationship not specifically addressed in this Agreement, are outlined, subject to, and governed by the Initial Franchise Agreement signed in conjunction with this agreement.
11. GUARANTY
The Developer named on the following page agrees to abide by the terms of this Agreement. The signature of an individual or individuals as sole proprietors, joint tenants, or tenants in common constitutes their personal agreement to such terms. The signature of an individual or individuals on behalf of an entity constitutes the entity's agreement to such terms.
In addition, the signatures of all individuals below, in any capacity, also constitute their personal joint and several agreement to perform all the obligations in and relating to this Agreement, including, but not limited to, the obligations stated above, the obligation to make specified payments, and pay any other debts due to us. Each Guarantor agrees to guarantee us against all liability, loss, harm, damage, costs, and expenses (including attorney fees) that we may incur because of your failure to observe your obligations. The liabilities and obligations of each Guarantor will not be released, discharged, or affected by our release or discharge of or dealing with you under any of these agreements; or by anything we do, suffer, or allow to be done in relation to you; or by change, alteration, or modification of any of the agreements; or by any compromise, arrangement, or plan of reorganization affecting you; or by your bankruptcy or insolvency;
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
The 2024 Deka Lash Franchise Disclosure Document (FDD) does not explicitly state that Deka Lash is liable for the debts and obligations incurred by its franchisees. However, the FDD does include clauses where other parties may be held accountable for the franchisee's obligations.
Specifically, the franchise agreement includes a clause where individuals signing the agreement, including spouses, agree to a "personal joint and several agreement" to fulfill all obligations related to the agreement. This includes the responsibility to make specified payments and settle any debts owed to Deka Lash. These individuals act as guarantors, protecting Deka Lash against liability, losses, harm, damages, costs, and expenses, including attorney fees, resulting from the franchisee's failure to meet their obligations.
This guarantee remains in effect until the franchisee's obligations under the agreement are fully satisfied. All signatories also waive any rights to require Deka Lash to pursue action against other signatories first. This indicates that while Deka Lash does not assume the franchisee's debts, it seeks guarantees from related parties to ensure financial obligations are met.