Besides Sections 12, what other section of the Hardees agreement are the guarantors personally bound by?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantors hereby: (A) guarantee to HR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement or at law or in equity, that Developer and any assignee of Developer's interest under the Agreement shall: (1) punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement and (2) punctually pay all other monies owed to HR and/or its affiliates; (B) agree to be personally bound by each and every provision in the Agreement, including, without limitation, the provisions of Sections 12 and 16; and (C) agree to be personally liable for the breach of each and every provision in the Agreement.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, guarantors are bound by provisions in Sections 12 and 16 of the agreement. Specifically, the guarantors agree to be personally bound by each and every provision in the agreement, including, without limitation, the provisions of Sections 12 and 16. They also agree to be personally liable for the breach of each and every provision in the agreement.
This means that if the franchisee fails to meet their obligations under the franchise agreement, Hardees can seek recourse directly from the guarantors. This personal liability extends to all aspects of the agreement, not just financial obligations.
For a prospective Hardees franchisee, this highlights the importance of carefully considering who will act as a guarantor and ensuring they fully understand the extent of their potential liability. It is common in franchising for franchisors to require personal guarantees, especially from smaller or newer entities, to ensure the franchisee's commitment and financial stability. The guarantor should seek independent legal advice to fully understand the implications of the guarantee before signing.