Does a waiver granted by Engel & Volkers modify the guarantee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Any waiver, extension of time or other indulgence granted by Franchisor or its agents, successors or assigns, with respect to the Franchise Agreement or any other agreement(s) by and between Franchisee and Franchisor, shall in no way modify or amend this Guarantee, which shall be continuing, absolute, unconditional and irrevocable. It is understood and agreed by the undersigned that the provisions, covenants and conditions of this Guarantee shall inure to the benefit of Franchisor, its successors and assigns. This Guarantee may be assigned by Franchisor voluntarily or by operation of law without reducing or modifying the liability of the undersigned hereunder.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, any waiver, extension of time, or other leniency granted by Engel & Volkers regarding the Franchise Agreement or any other agreements between the franchisee and Engel & Volkers does not modify or amend the guarantee. The guarantee remains continuing, absolute, unconditional, and irrevocable. This means that even if Engel & Volkers provides some flexibility or waives certain requirements for the franchisee, the guarantor's obligations remain fully in effect.
This provision protects Engel & Volkers by ensuring that the guarantee remains valid regardless of any changes or waivers made to the Franchise Agreement. It also clarifies that the guarantee benefits Engel & Volkers, its successors, and assigns, and can be transferred without affecting the guarantor's liability. This is a standard practice in franchising, as franchisors typically want to ensure that their financial interests are protected by a solid and unchanging guarantee.
For a prospective Engel & Volkers franchisee, this means that any individual providing a guarantee (often a principal owner if the franchisee is a business entity) should understand that their obligations are not lessened by any waivers or modifications to the Franchise Agreement. The guarantor remains fully responsible for the franchisee's obligations, regardless of any flexibility Engel & Volkers might offer. It is crucial for potential guarantors to carefully review the terms of the guarantee and understand the full extent of their financial commitment.
This clause aims to provide Engel & Volkers with a stable and reliable form of security, ensuring that the guarantor's obligations remain intact even if the franchisor makes concessions to the franchisee. Franchisees should ensure that any guarantors are fully aware of this provision and its implications before signing the guarantee.