Under the Floyds 99 guaranty, is the guarantor's liability joint and several?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that:
-
- His or her direct and immediate liability under this guaranty shall be joint and several;
-
- He or she shall render any payment or performance required under the Agreement upon demand if Developer fails or refuses punctually to do so;
-
- This liability shall not be contingent or conditioned upon pursuit by Franchisor or its affiliates of any remedies against Developer or any other person;
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 FDD, the guarantor's liability is joint and several. This means that each guarantor is individually liable for the full amount of the debt or obligation, as well as being jointly liable with the other guarantors. Floyds 99 Franchising, LLC can pursue any one or all of the guarantors for the full amount owed, regardless of the contributions or responsibilities of the other guarantors. This provides Floyds 99 with a stronger position, as they are not required to pursue all guarantors simultaneously or proportionally.
For a prospective Floyds 99 franchisee, this implies that if they are asked to provide a personal guaranty, their assets are at risk for the entire debt, not just a portion. It is important to fully understand the extent of the obligations being guaranteed and the potential financial exposure. The franchisee should also be aware that Floyds 99 is not obligated to pursue the primary debtor (the franchisee's business) or any other guarantor before seeking full payment from them.
Furthermore, the FDD states that each guarantor waives certain rights, including the right to require Floyds 99 to take action against the developer or any other person as a condition of liability. The guarantor also consents to render payment or performance upon demand if the developer fails to do so, and this liability is not contingent upon Floyds 99 pursuing remedies against the developer. This underscores the comprehensive nature of the guaranty and the significant responsibilities assumed by the guarantor.
In summary, the joint and several liability provision in the Floyds 99 guaranty agreement places a substantial financial risk on the guarantor. A prospective franchisee should carefully consider the implications of this provision and seek legal counsel to fully understand their obligations and potential liabilities before signing any guaranty agreement.