If the Fat Shack franchisee fails to perform, what is the guarantor obligated to do?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT V TO FRANCHISE AGREEMENT
GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS
- A. In consideration of, and as an inducement to, the execution of the above Franchise Agreement ("Franchise Agreement") by FAT SHACK INC. ("FSI"), each of the undersigned hereby personally and unconditionally:
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- Guarantees to FSI and its successors and assigns, for the term of the Franchise Agreement, including renewals thereof, that franchisee named on the signature page ("Franchisee") shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Franchise Agreement; and
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- Agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Franchise Agreement, including but not limited to, the terms of the articles and sections pertaining to non-competition during and after the term, confidentiality and the Marks and copyrighted works of FSI.
- 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
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 are detailed in Exhibit V to the Franchise Agreement, titled "GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS." The guarantor personally and unconditionally guarantees to Fat Shack Inc. (FSI) that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Franchise Agreement for its entire term, including renewals. The guarantor also agrees to be personally bound by and liable for any breach of any provision within the Franchise Agreement. This includes, but is not limited to, terms related to non-competition during and after the franchise term, confidentiality, and the use of Fat Shack's trademarks and copyrighted materials. This obligation extends for the duration of the Franchise Agreement, including any renewals.
The guarantor waives several rights, including the need for FSI to provide acceptance and notice of acceptance of the guarantor's undertaking. They also waive the right to receive notice of demand for payment, notice of nonperformance, and any requirement that FSI first pursue action against the franchisee or any other person before seeking recourse from the guarantor. Additionally, the guarantor relinquishes the right to be notified of any amendments, modifications, or deletions to the Franchise Agreement's terms, as well as any termination notices related to other guarantors or any other legal or equitable defenses they might have.
The guarantor consents and agrees that their liability is direct, immediate, joint, and several. This means that if the franchisee fails to make a required payment or performance, the guarantor will render that payment or performance upon demand. The guarantor's liability is not contingent upon FSI pursuing remedies against the franchisee or any other party first. Furthermore, the guarantor's liability will not be diminished or affected by any amendments, assignments, modifications, or extensions of time related to the Franchise Agreement. This ensures that Fat Shack has a direct and unconditional recourse to the guarantor should the franchisee default on their obligations.