Who does the Guaranty and Assumption of Franchisee's Obligations extend to besides Floyds 99 Franchising, LLC?
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 extends beyond Floyds 99 Franchising, LLC to its affiliates and their respective successors and assigns. This means that the individuals signing the Guaranty are not only guaranteeing the franchisee's obligations to Floyds 99 itself but also to any related companies or entities that are part of the Floyds 99 corporate structure, as well as anyone who might later acquire the rights or responsibilities of Floyds 99.
This agreement ensures that these individuals personally guarantee the franchisee's performance and payments under the Franchise Agreement for its entire term and beyond, as specified in the agreement. They are also agreeing to be personally liable for any breaches of the Franchise Agreement. This is a significant commitment, as it puts the personal assets of the guarantors at risk if the franchisee fails to meet their obligations.
The individuals signing the Guaranty also waive several rights, including the right to receive notice of acceptance of the guaranty, notice of demand for payment, and any requirement that Floyds 99 first pursue action against the franchisee before seeking recourse from the guarantors. This waiver streamlines the process for Floyds 99 to enforce the guaranty in case of default by the franchisee. This is a common practice in franchising, as it provides the franchisor with added security and recourse in case the franchisee fails to meet their contractual obligations.
Prospective Floyds 99 franchisees should carefully consider the implications of the Guaranty and Assumption of Franchisee's Obligations, especially if they are signing it personally. They should also seek legal counsel to fully understand the extent of their obligations and potential liabilities.