Under the Dq Treat operating agreement guarantee, what does each Guarantor waive?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the Guarantors waives: (i) notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed; (ii) protest and notice of default to any party respecting the indebtedness or nonperformance of any obligations guaranteed; or (iii) any right that the Guarantors may have to require Company, as a condition of liability or otherwise, to proceed against any other person or to proceed against or exhaust any security held by Company at any time or to pursue any right of action accruing to Company under the operating agreement. Company may either proceed against the Guarantors and Licensee, jointly and severally, or proceed against any of the Guarantors without having commenced any action, or having obtained any arbitration award or judgment, against Licensee.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat Franchise Disclosure Document, the Guarantors under the operating agreement guarantee waive specific rights and notices to ensure the franchisor, American Dairy Queen Corporation, can effectively enforce the guarantee.
Specifically, each Guarantor waives (i) the right to receive notice of demand for payment regarding any debt or unfulfilled obligations that are guaranteed; (ii) the right to protest and receive notice of default concerning any guaranteed debt or unfulfilled obligations; and (iii) any right to compel Dq Treat to first pursue action against any other person or to utilize any security held by Dq Treat before pursuing action against the Guarantors.
This waiver allows Dq Treat to proceed directly against the Guarantors, jointly or individually, without first taking action against the licensee. This provision is designed to streamline the process for Dq Treat to recover any losses resulting from the licensee's failure to meet their obligations under the operating agreement. This is a significant point for potential franchisees to consider, especially if they are acting as a Guarantor, as it means they could be held immediately and directly responsible for the licensee's debts or failures without the franchisor needing to exhaust other remedies first.