Can FSI amend the obligations guaranteed by the guarantor of a Fat Shack franchise?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Each of the undersigned waives the following:
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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.
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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 Franchise Agreement or any extension of time, credit or other indulgence which FSI may from 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's obligations can be affected by amendments to the Franchise Agreement. Specifically, the guaranty agreement states that the guarantor waives notice of any changes to the obligations they are guaranteeing. This means Fat Shack can modify the Franchise Agreement without directly notifying the guarantor, and the guarantor remains bound by the updated terms.
This waiver has significant implications for potential Fat Shack franchisees and their guarantors. The guarantor's liability will not be diminished or affected by any amendment, assignment, or modification of the Franchise Agreement, or any extension of time, credit, or other leniency that Fat Shack might offer. This clause ensures that the guarantor remains fully responsible for the franchisee's obligations, even if those obligations change over time.
This type of clause is relatively common in franchise agreements, as it protects the franchisor's interests by ensuring continuous and unconditional guarantees. However, it places a considerable burden on the guarantor, who must remain vigilant about the franchisee's compliance with the evolving terms of the Franchise Agreement. A prospective franchisee should carefully consider the implications of this clause and ensure that any guarantor is fully aware of the potential risks involved before signing the guaranty agreement.