Does the Exit franchise agreement receipt waive legal or equitable principles related to marshaling assets or requiring a creditor to proceed against specific property?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor's obligations under this Guaranty shall be binding upon Guarantor and its respective successors and assigns and shall remain in full force and effect irrespective of:
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- Any legal or equitable principle of marshaling or other rule of law requiring a creditor to proceed against specific property, apply proceeds in a particular manner or otherwise exercise remedies so as to preserve the several estates of joint obligors or common debtors;
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the guarantor's obligations are not affected by any legal or equitable principle of marshaling or other rule of law requiring a creditor to proceed against specific property. This means that the guarantor cannot require Exit to pursue specific assets or follow a particular order when seeking payment. The guarantor's obligations remain in full force regardless of such legal principles.
This waiver benefits Exit by allowing them to pursue the guarantor without having to navigate potentially complex legal requirements related to asset marshaling. It simplifies the process of recovering amounts due under the Franchise Agreement in case of franchisee default. The guarantor is essentially agreeing to be fully liable without conditions related to how Exit pursues other potential sources of payment.
For a prospective Exit franchisee, this clause highlights the importance of understanding the full extent of any personal guarantee they or others may be providing. The guarantor's liability is broad and not subject to typical legal limitations that might otherwise protect their assets or require the franchisor to pursue other avenues first. This could place significant personal financial risk on the guarantor.