Is the Guaranty and Assumption of Franchisee's Obligations continuing and irrevocable during the term of the Floyds 99 Franchise Agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of the above Franchise Agreement (the "Agreement") by Floyd's 99 Franchising, LLC (the "Franchisor"), each of the undersigned hereby personally and unconditionally:
Guarantees to the Franchisor and its affiliates and their respective successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that the Franchisee as that term is defined in the Agreement (the "Franchisee") 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.
Each of the undersigned waives the following:
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- Acceptance and notice of acceptance by the Franchisor and its affiliates of the foregoing undertakings;
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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 the Franchisee or any other person as a condition of liability; and
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- Any and all other notices and legal or equitable defenses to which he or she may be entitled.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the Guaranty and Assumption of Franchisee's Obligations is designed to ensure that the franchisee fulfills all commitments outlined in the Franchise Agreement. The guarantor personally guarantees to Floyds 99 that the franchisee will punctually pay and perform every agreement and covenant detailed in the Franchise Agreement for the term of the agreement and thereafter as provided in the agreement. This obligation extends to Floyds 99's affiliates, successors, and assigns.
Furthermore, the guarantor agrees to be personally bound by and liable for any breaches of the Franchise Agreement's provisions. This means that if the franchisee fails to meet their obligations, the guarantor will be held responsible. The guarantor also waives several rights, including the right to receive notices of acceptance, demand for payment, or default. They also waive the right to require Floyds 99 to first pursue action against the franchisee before seeking recourse from the guarantor.
This arrangement provides Floyds 99 with a direct avenue to seek fulfillment of the franchisee's obligations from the guarantor, offering an additional layer of security for the franchisor. The guarantor's obligations continue for the term of the agreement and potentially beyond, as specified in the agreement, indicating a long-term commitment. Prospective franchisees should carefully review the Guaranty and Assumption of Franchisee's Obligations with their legal advisors to fully understand the extent of their personal liability and the duration of their commitment.