Under the Engel & Volkers guarantee, is the liability of the undersigned direct and immediate?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- (i) acceptance and notice of acceptance by Franchisor of the foregoing undertakings;
- (ii) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
- (iii) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
- (iv) any right the undersigned may have to require that an action be brought against Franchisee or any other person as a condition of liability; and
- (v) any and all other notices and legal or equitable defenses to which the undersigned may be entitled.
The undersigned consents and agrees that:
- (i) the undersigned's direct and immediate liability under this Guarantee shall be joint and several with all signatories to this and similar guaranties of Franchisee's obligations;
- (ii) the undersigned shall render any payment or performance required under the Franchise Agreement upon demand if Franchisee fails or refuses punctually to do so;
- (iii) this Guarantee shall apply to any claims Franchisor may have due to return of any payments or property Franchisor or its Affiliates may have received from Franchisee as a preference, fraudulent transfer or conveyance or the like in any legal proceeding;
- (iv) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Franchisee or any other person;
- (v) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Franchisor may from time to time grant to Franchisee or to any other person, including without limitation the
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the liability of the undersigned under the guarantee is indeed direct and immediate. Specifically, the guarantee stipulates that the undersigned's liability is joint and several with all signatories to similar guarantees of the franchisee's obligations. This means that each person signing the guarantee can be held individually liable for the full amount of the franchisee's debt or obligations.
Furthermore, the guarantee states that the undersigned must render any payment or performance required under the Franchise Agreement upon demand if the franchisee fails or refuses to do so punctually. This underscores the direct nature of the liability, as the guarantor is expected to step in immediately if the franchisee defaults. Engel & Volkers does not need to first pursue remedies against the franchisee or any other person before demanding payment or performance from the guarantor.
This immediate and direct liability is not contingent upon Engel & Volkers pursuing other remedies against the franchisee. The guarantor's obligations remain even if Engel & Volkers grants extensions of time, credit, or other indulgences to the franchisee. The guarantee remains in effect during and after the term of the License Documents until the franchisee's duties and obligations to Engel & Volkers and its affiliates are fully discharged. This comprehensive structure ensures that Engel & Volkers has a clear and enforceable recourse in case of franchisee default, with the guarantor acting as a primary source of obligation.