Are Guarantors personally liable for breaches of any provision in the Hardees Franchise Agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- **2.
Guarantee and Assumption of Franchisee's Obligations.** 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 Franchisee and any assignee of Franchisee'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 20 and 25; and (C) agree to be personally liable for the breach of each and every provision in the Agreement.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, Guarantors are indeed personally liable for breaches of the Franchise Agreement. Specifically, Guarantors guarantee to Hardees that the Franchisee will adhere to all aspects of the agreement. This obligation extends throughout the term of the agreement and beyond, as legally required.
This guarantee includes ensuring the Franchisee makes all payments and fulfills every commitment outlined in the Franchise Agreement. Moreover, Guarantors explicitly agree to be personally bound by each provision within the agreement, including sections related to restrictions and obligations. This encompasses personal liability for any breach of these provisions.
In practical terms, this means that if a Hardees franchisee fails to meet their financial or operational obligations, Hardees can pursue the Guarantors directly for recourse. The Guarantors' personal assets are at risk if the franchisee violates the agreement. This is a significant consideration for anyone acting as a Guarantor, as they are taking on substantial personal financial risk related to the success and compliance of the Hardees franchise.
It is important for potential Hardees franchisees and their guarantors to fully understand the implications of this clause. They should seek legal counsel to review the Franchise Agreement and Guarantee to fully grasp the scope of their obligations and potential liabilities. This level of personal guarantee is common in franchising, as it provides the franchisor with added security and assurance that the franchisee will uphold their end of the agreement.