Are there any geographic limitations specified in the Desi District Guaranty?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
------------------------------------------------------------------------------------------|----------------------------------------------------| | | franchise in accordance with Section 6.1 of the Franchise Agreement. | | | 1. | The Location of the Business is: | | | 2. | The Territory of the Business is: | DESI DISTRICT FRANCHISE GROUP, LLC By: Name: Title: Date: |
Attachment 3 to Franchise Agreement
GUARANTY AND NON-COMPETE AGREEMENT
This Guaranty and Non-Compete Agreement (this "Guaranty") is executed by the undersigned person(s) (each, a "Guarantor") in favor of Desi District Franchise Group, LLC, a Delaware Limited Liability Company ("Desi District Franchise Group").
Background Statement: _______________________ ("Franchisee") desires to enter into a Franchise Agreement with Desi District Franchise 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. Confidential Information. With respect to all Confidential Information Guarantor shall (a) adhere to all security procedures prescribed by Desi District Franchise Group for maintaining confidentiality, (b) disclose such information to its employees only to the extent necessary for the operation of the Business;
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, the Guaranty and Non-Compete Agreement does not explicitly state geographic limitations within the sections provided. The agreement focuses on the guarantor's commitment to ensuring the franchisee fulfills their obligations, handling confidential information, and adherence to non-compete clauses. The agreement specifies that the guarantor is bound by the terms of the Franchise Agreement, which may contain geographic limitations.
The Guaranty ensures that the franchisee meets all financial and operational requirements outlined in the Franchise Agreement. The guarantor must make payments or fulfill obligations if the franchisee fails to do so, upon demand from Desi District. The guarantor also agrees to protect Desi District's confidential information and adhere to security procedures.
While the provided excerpts of the Guaranty agreement do not specify geographic limitations, it is important to note that the Franchise Agreement itself, referenced within the Guaranty, likely contains such limitations. A prospective franchisee should carefully review the entire Franchise Agreement, particularly the sections on territory and non-compete obligations, to fully understand any geographic restrictions. It would be prudent to discuss these aspects with the franchisor to gain clarity on the specific areas where the franchisee is permitted to operate and any restrictions on competing businesses.