For what term does the personal guarantee extend regarding the Fat Shack Development Agreement?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. In consideration of, and as an inducement to, the execution of the above Development Agreement ("Development 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 Development 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 Development 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 Development Agreement.
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the personal guarantee extends for the term of the Development Agreement, including any renewals. This means that the guarantor is responsible for the franchisee's obligations throughout the entire duration of the Development Agreement, and if the agreement is renewed, the guarantee continues for the renewal period as well.
Specifically, the guarantor ensures that the franchisee will punctually pay and perform every undertaking, agreement, and covenant outlined in the Development Agreement. The guarantor also agrees to be personally bound by and liable for any breaches of the Development Agreement's provisions. This obligation remains in effect for the entire term of the agreement, including any renewals.
This is a significant commitment for the guarantor, as they are essentially vouching for the franchisee's financial and operational performance. The guarantor waives certain rights, such as the right to demand action against the franchisee before being held liable. Therefore, anyone considering acting as a guarantor should carefully review the Development Agreement and understand the full extent of their obligations and potential liabilities.