Does the acceptance of partial payment modify the Guaranty for a Golden Krust Caribbean Restaurant franchise?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
We and you will not be deemed to have waived or impaired any right, power or option reserved by this Agreement (including, without limitation, the right to demand exact compliance with every term, condition and covenant herein or to declare any breach thereof to be a default and to terminate this Agreement prior to the expiration of its term)-by virtue of any custom or practice at variance with the terms hereof; our or your failure, refusal or neglect to exercise any right under this Agreement or to insist upon exact compliance by the other with our and your obligations hereunder, including, without limitation, any System Standard; our waiver, forbearance, delay, failure or omission to exercise any right, power or option, whether of the same, similar or different nature, with respect to other Golden Krust Restaurants; the existence of other franchise agreements for Golden Krust Restaurants which contain different provisions from those contained herein; or our acceptance of any payments due from you after any breach of this Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will constitute a waiver, compromise, settlement or account and satisfaction. We are authorized to remove or obliterate any legend or endorsement, and such legend or endorsement will have no effect.
Source: Item 22 — CONTRACTS (FDD page 35)
What This Means (2024 FDD)
According to the 2024 Franchise Disclosure Document, Golden Krust Caribbean Restaurant's stance on accepting payments after a breach of the agreement is clearly defined. The franchise agreement specifies that the acceptance of payments from the franchisee, even after a breach of the agreement, does not constitute a waiver of Golden Krust Caribbean Restaurant's rights. This means that even if Golden Krust Caribbean Restaurant accepts a payment from a franchisee who is in default, they still retain the right to enforce the original terms of the agreement and pursue any available remedies for the breach.
This provision is designed to protect Golden Krust Caribbean Restaurant's interests by ensuring that they do not inadvertently waive their rights through the acceptance of payments. It also clarifies that any special endorsements on checks or other payment methods will not be considered a waiver or compromise. Golden Krust Caribbean Restaurant is authorized to remove or disregard any such endorsements, further reinforcing their position.
For a prospective franchisee, this clause highlights the importance of adhering to the terms of the franchise agreement. Even if Golden Krust Caribbean Restaurant accepts payments, it does not excuse any prior breaches or prevent them from taking action based on those breaches. Franchisees should not rely on the acceptance of payments as an indication that a breach has been forgiven or that the terms of the agreement have been modified. This protects the brand's standards and reputation, as all franchisees must adhere to the same standards, regardless of payment history.
This type of clause is relatively common in franchise agreements, as franchisors seek to maintain their ability to enforce the agreement's terms while still working with franchisees to resolve payment issues. Franchisees should be aware of this provision and understand that strict compliance with the franchise agreement is essential to avoid potential disputes or termination.