Does the Desi District Guaranty include any financial thresholds or limits to the Guarantor's liability?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
e Group for the franchise of a Desi District business (the "Franchise Agreement"; capitalized terms used but not defined in this Guaranty have the meanings given in the Franchise Agreement). Guarantor owns an equity interest in Franchisee. Guarantor is executing this Guaranty in order to induce Desi District Franchise Group to enter into the Franchise Agreement.
Guarantor agrees as follows:
- 1. Guaranty. Guarantor hereby unconditionally guarantees to Desi District Franchise Group and its successors and assigns that Franchisee shall pay and perform every undertaking, agreement and covenant set forth in the Franchise Agreement and further guarantees every other liability and obligation of Franchisee to Desi District Franchise Group, whether or not contained in the Franchise Agreement. Guarantor shall render any payment or performance required under the Franchise Agreement or any other agreement between Franchisee and Desi District Franchise Group upon demand from Desi District Franchise Group. Guarantor waives (a) acceptance and notice of acceptance by Desi District Franchise Group of this Guaranty; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations of Franchisee; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right Guarantor may have to require that an action be brought against Franchisee or any other person or entity as a condition of liability hereunder; (e) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the execution of and performance under this Guaranty by the undersigned; (f) any law which requires that Desi District Franchise Group make demand upon, assert claims against or collect from Franchisee or any other person or entity (including any other guarantor), foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Franchisee or any other person or entity (including any other guarantor) prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guaranty; and (g) any and all other notices and legal or equitable defenses to which Guarantor may be entitled.
- **2.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Guaranty agreement stipulates that the Guarantor unconditionally guarantees the franchisee's obligations to Desi District. Specifically, the Guarantor ensures that the franchisee will pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement. This guarantee extends to every other liability and obligation the franchisee owes to Desi District, regardless of whether it's included in the Franchise Agreement.
The Guarantor is obligated to make any payment or provide any performance required under the Franchise Agreement or any other agreement between the franchisee and Desi District upon demand from Desi District. The Guarantor also waives several rights, including the right to require Desi District to first pursue action against the franchisee before demanding payment or performance from the Guarantor.
The agreement also states that the Guarantor's liability will not be diminished or affected by any amendments to the Franchise Agreement, extensions of time or credit granted to the franchisee, or the acceptance of partial payments. This means the Guarantor's obligations remain intact even if the terms of the franchise relationship change or if Desi District shows leniency to the franchisee. The Guaranty does not specify any financial thresholds or limits to the Guarantor's liability, suggesting that the Guarantor's responsibility extends to the full scope of the franchisee's obligations to Desi District.