Will the acceptance of partial payment by Desi District affect the Guarantor's liability?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
Guarantor agrees that Guarantor's liability hereunder shall not be diminished, relieved or otherwise affected by (a) any amendment of the Franchise Agreement, (b) any extension of time, credit or other indulgence which Desi District Franchise Group may from time-to-time grant to Franchisee or to any other person or entity, or (c) the acceptance of any partial payment or performance or the compromise or release of any claims.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the guarantor's liability will not be affected by the acceptance of any partial payment. The Guaranty and Non-Compete Agreement specifies that the guarantor's obligations remain even if Desi District accepts partial payments from the franchisee.
This means that if the franchisee fails to fulfill their financial obligations under the Franchise Agreement, the guarantor is still responsible for the full amount, regardless of any partial payments Desi District might have accepted. This provision protects Desi District by ensuring that the guarantor remains fully liable for the franchisee's debts, even if the franchisor shows some flexibility in accepting payments.
For a prospective Desi District franchisee, this highlights the importance of understanding the full extent of the guarantor's obligations. The guarantor should be fully aware that their liability is not reduced or affected by any partial payments or compromises Desi District might make with the franchisee. This clause is designed to provide Desi District with maximum security regarding the franchisee's financial commitments.