Will an amendment to the Ella Cafe Franchise Agreement diminish the Guarantor's liability?
Ella_Cafe 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 Ella Coffee Company 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 50)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, a Guarantor's liability will not be diminished if the Franchise Agreement is amended. The Guarantor's obligations remain intact regardless of any changes to the agreement between Ella Cafe and the franchisee. This protection extends to any extensions of time, credit, or other allowances that Ella Cafe might grant to the franchisee.
Furthermore, the Guarantor's liability is not affected by the acceptance of partial payments, performance compromises, or claim releases. This provision ensures that Ella Cafe can pursue the Guarantor for the full guaranteed amount, even if the franchisee receives concessions or leniency in other areas. The Guarantor remains fully responsible for the franchisee's obligations as outlined in the original Franchise Agreement.
This clause protects Ella Cafe by ensuring that the guaranty remains enforceable despite any modifications or accommodations made with the franchisee. Prospective franchisees should be aware that if they act as a guarantor, their liability is unlikely to be reduced or eliminated due to amendments or other changes to the Franchise Agreement. It is advisable for potential guarantors to carefully consider the full scope of their obligations and seek legal counsel to fully understand the implications of the guaranty.