Does the Guaranty and Assumption of Developer's Obligations for Floyds 99 extend beyond the term of the Development Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of the above Development Agreement (the "Agreement") by Floyd's 99 Franchising, LLC (the "Franchisor"), each of the undersigned hereby personally and unconditionally:
Guarantees to Franchisor and its affiliates and their respective successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that Developer as that term is defined in the Agreement (the "Developer") shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Developer's Obligations extends beyond the term of the Development Agreement. Specifically, the guarantors personally guarantee the developer's obligations to Floyds 99 Franchising, LLC for the term of the Development Agreement and thereafter, as provided in the agreement. This means that the personal guarantees provided by the developer's owners are not limited to just the duration of the Development Agreement itself.
This has significant implications for the individuals signing the guaranty. They remain liable for the developer's performance and financial obligations even after the Development Agreement expires or is terminated. This could include ongoing responsibilities or liabilities that arise from actions taken during the term of the agreement.
For a prospective Floyds 99 developer, it's crucial to understand the full scope of these continuing obligations. They should carefully review the Development Agreement to identify which obligations survive termination or expiration. Consulting with a legal advisor is advisable to fully grasp the extent of the personal financial risk involved in providing such a guarantee. This is a fairly standard practice in franchising, as franchisors seek assurance that the developer is fully committed to fulfilling their obligations, even if the business relationship ends.