If the Franchisee has guarantors, what obligations are they guaranteeing under the Hardees Franchise Agreement?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- **1.
Guarantee To Be Bound by Certain Obligations.** Guarantors hereby personally and unconditionally 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 each will be personally bound by the restrictions contained in Section 20 of the Agreement.
- **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.
- **3.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to the 2025 Hardees Franchise Disclosure Document, guarantors play a significant role in ensuring the franchisee's obligations are met. The guarantors guarantee to Hardees that they will be personally bound by the restrictions outlined in Section 20 of the Franchise Agreement, which likely covers aspects such as confidentiality, non-compete clauses, and protection of Hardees's intellectual property. This obligation extends for the term of the agreement and beyond, as specified within the agreement or by law.
Furthermore, the guarantors guarantee that the franchisee will punctually pay and perform every agreement and covenant detailed in the Franchise Agreement. This includes ensuring all monies owed to Hardees and its affiliates are paid on time. The guarantors also agree to be personally bound by every provision in the agreement, including Sections 20 and 25, and accept personal liability for any breaches of these provisions. This comprehensive guarantee ensures Hardees has recourse beyond the franchisee itself, adding a layer of financial and legal security.
In essence, the guarantee ensures that Hardees can pursue the guarantor directly if the franchisee fails to meet its obligations. The guarantor's liability is joint and several, meaning Hardees can seek full performance from any one guarantor without first pursuing the franchisee. The guarantee remains in effect even if the agreement is amended or if Hardees grants extensions or indulgences to the franchisee, unless Hardees provides a written release. This protects Hardees from potential losses due to franchisee non-compliance or financial instability.
Moreover, all members of the Continuity Group and their spouses, if applicable, must jointly and severally guarantee the franchisee's payment and performance under the Hardees agreement, binding themselves to its terms through a Guarantee and Assumption of Franchisee's Obligations. Hardees retains the discretion to waive this requirement for some or all individuals or to limit the scope of the guarantee. Hardees can also request personal financial statements from any guarantor periodically. This comprehensive approach to guarantees underscores the importance Hardees places on ensuring franchisees meet their obligations and maintain the integrity of the Hardees brand.