Is the Engel & Volkers guarantor's liability joint and several with other signatories?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
further understands and agrees
that Recipient's obligations hereunder may not be assigned by Recipient without the prior written consent of Franchisor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day, month, and year first above written.
| Recipient: | ACKNOWLEDGED BY FRANCHISOR: |
|---|---|
| Signature: | ENGEL & VÖLKERS AMERICAS, INC. |
| Print Name: | |
| Position with Franchisee: | By: |
| Date of signature: | Title: |
| Home address: | Date of signature: |
| By: Title: Date of signature: |
Appendix 4
PRINCIPAL'S GUARANTEE AND ASSUMPTION OF OBLIGATIONS
PRINCIPAL'S GUARANTEE AND ASSUMPTION OF OBLIGATIONS
| Franchise Agreement dated _ | (the "Franchise Agreement") by and between ENGEL |
|---|---|
| & VÖLKERS AMERICAS, INC. ("Franchisor") and | ("Franchisee"), and |
| for other good and valuable consideration, each of the undersigned hereby, for themselves, their heirs, | |
| successors and assigns, jointly, individually and severally, personally, absolutely and unconditionally: | |
| (1) guarantees to Franchisor and its parent and affiliates and their successors and assigns, for the term of | |
| the Franchise Agreement and thereafter as provided in the Franchise Agreement, that Franchisee shall | |
| punctually pay and perform each and every undertaking, agreement and covenant set forth in the Franchise | |
| Agreement and any documents, agreements, instruments and promissory notes executed pursuant to or in | |
| connection with the Franchise Agreement (collectively, the "Franchise Documents"); and (2) agrees to be | |
| personally bound by, and personally liable for the breach of, each and every provision in the Franchise | |
| Documents applicable to Principals of Franchisee. |
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if more than one person executes the guarantee, their liability is joint and several. This means that each guarantor is individually liable for the full amount of the franchisee's obligations. Engel & Volkers can pursue any one or all of the guarantors for the full debt, regardless of their individual ownership stake or involvement. This protects Engel & Volkers by ensuring they can recover the full amount owed, even if one guarantor is unable to pay.
This type of guarantee is common in franchising, as it provides the franchisor with a higher level of security. However, it also means that potential guarantors should carefully consider the risks before signing. If the franchisee defaults, a guarantor could be held responsible for the entire debt, even if they only own a small percentage of the business.
Specifically, the FDD states that each guarantor is "jointly, individually and severally, personally, absolutely and unconditionally" liable. This reinforces the comprehensive nature of the guarantee and the guarantor's commitment to ensuring the franchisee fulfills all obligations under the Franchise Agreement. The guarantor also agrees to be "personally bound by, and personally liable for the breach of, each and every provision in the Franchise Documents applicable to Principals of Franchisee."
Prospective Engel & Volkers franchisees should ensure that all parties signing a guarantee understand the full extent of their obligations and potential liabilities. It may be prudent to seek independent legal advice before signing any guarantee agreement.