Does the acceptance of partial payment by FSI from a Fat Shack franchisee affect the Guaranty?

According to Fat Shack's 2025 Franchise Disclosure Document, the Guaranty signed by individuals to ensure a franchisee's obligations are met is not affected by partial payments. Specifically, the guarantor's liability will not be diminished, relieved, or otherwise affected by any amendment, assignment, or modification of the Development Agreement or any extension of time. This means that even if Fat Shack Inc. (FSI) accepts partial payments or modifies payment terms with the franchisee, the guarantor remains fully liable for the franchisee's obligations as originally agreed.

This provision is significant for potential Fat Shack franchisees because it clarifies the extent of the personal guarantee required. Individuals signing the Guaranty should understand that their obligations are comprehensive and not easily discharged. The waiver includes defenses related to amendments or modifications of the agreement, ensuring the guarantor remains liable even if the payment schedule or other terms are altered between Fat Shack and the franchisee.

For prospective guarantors, this underscores the importance of carefully evaluating the franchisee's business plan and financial stability before signing the Guaranty. Given the broad scope of the guarantee, it would be prudent to seek legal counsel to fully understand the implications and potential risks involved. The guarantor's commitment is direct, immediate, and not contingent upon Fat Shack pursuing other remedies against the franchisee, making it a serious financial undertaking.