What actions can Fat Shack Inc. take without notice to or consent of the guarantor?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Each of the undersigned waives the following:
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- Acceptance and notice of acceptance by FSI of the foregoing undertaking;
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- Notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
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- Protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
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- Any right he or she may have to require that any action be brought against Franchisee or any other person as a condition of liability; and
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- Notice of any amendment, modification, deletion or addition of any term or condition of or to any of the obligations hereby guaranteed.
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- Notice of any termination as to future liability of any other guarantor.
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- Any and all other notices and legal or equitable defenses to which he or she may be entitled.
- C. Each of the undersigned consents and agrees that:
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- His or her direct and immediate liability under this guaranty will be joint and several;
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- He or she will render any payment or performance required under the Development Agreement upon demand if Franchisee fails or refuses punctually to do so;
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- His or her liability hereunder will not be contingent or conditioned upon pursuit by FSI of any remedies against Franchisee or any other person; and
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- His or her liability hereunder will not be diminished, relieved or otherwise affected by any amendment, assignment or modification of the Development Agreement or any extension of time
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the guarantor waives certain notices related to the Development Agreement and Franchise Agreement. Specifically, the guarantor waives acceptance and notice of acceptance by Fat Shack of the undertaking, notice of demand for payment of any indebtedness or nonperformance of any obligations guaranteed, protest and notice of default to any party, and any right to require action against the franchisee or any other person as a condition of liability. The guarantor also waives notice of any amendment, modification, deletion, or addition to the obligations guaranteed, notice of any termination as to future liability of any other guarantor, and any other legal or equitable defenses.
Furthermore, the guarantor consents and agrees that their liability is direct, immediate, joint, and several. They will render payment or performance if the franchisee fails to do so, and their liability is not contingent upon Fat Shack pursuing remedies against the franchisee or any other person. The guarantor's liability will also not be affected by any amendment, assignment, or modification of the Development Agreement or Franchise Agreement, or any extension of time.
In practical terms, this means Fat Shack can take various actions related to the franchise agreement without needing to notify or obtain consent from the guarantor. This includes modifying the agreement, extending deadlines, or even terminating the agreement under certain conditions. The guarantor's obligations remain in place regardless of these changes, and they are still responsible for ensuring the franchisee fulfills their obligations. This arrangement protects Fat Shack by ensuring a reliable party is accountable for the franchisee's performance, but it places a significant burden on the guarantor, who has limited control over the franchise's operations yet remains financially liable.