Under the Hardees guarantee, are the guarantors' liabilities joint and several?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Each of the undersigned consents and agrees that: (1) his direct and immediate liability under this Guarantee shall be joint and several; (2) he shall render any payment or performance required under the Agreement if Developer fails or refuses punctually to do so; (3) such liability shall not be contingent or conditioned upon pursuit by HR of any remedies against Developer or any other person; (4) such liability shall not be diminished, relieved or otherwise affected by any amendment of the Agreement, any extension of time, credit or other indulgence which HR may from time to time grant to Developer or to any other person including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this Guarantee, which shall be continuing and irrevocable during the term of the Agreement and for so long thereafter as there are monies or obligations owing from Developer to HR or its affiliates under the Agreement; and (5) monies received from any source by HR for application toward payment of the obligations under the Agreement and under this Guarantee may be applied in any manner or order deemed appropriate by HR.
In addition, if any of the undersigned ceases to be a member of the Continuity Group, a 10% Owner, or own any direct or indirect interest in Developer or any of the Franchised Restaurants, that person (and his spouse, if the spouse is also a guarantor) agrees that the obligations under this Guarantee shall continue to remain in force and effect unless HR in its sole discretion, in writing, releases those person(s) from this Guarantee.
Notwithstanding the provisions of the previous sentence, unless prohibited by applicable law, the obligations contained in Section 12.C. of the Agreement shall remain in force and effect for a period of 2 years after any such release by HR.
A release by HR of any of the undersigned shall not affect the obligations of any other Guarantor.
Source: Item 23 — Receipts (FDD pages 85–541)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the guarantors' liabilities under the guarantee are joint and several. This means that each guarantor is individually and collectively responsible for the full amount of the obligations. Hardees can pursue any one guarantor for the entire debt, regardless of whether other guarantors exist or their ability to pay.
This arrangement benefits Hardees by providing them with multiple avenues for recovering any losses. If one guarantor is unable to pay, Hardees can immediately seek the full amount from another guarantor who has the resources. This reduces the risk of non-payment and simplifies the collection process for Hardees.
For a prospective Hardees franchisee, this has significant implications. If multiple individuals or entities are acting as guarantors (for example, business partners), each one is taking on substantial personal risk. Even if one guarantor's share of the business is small, they could be held liable for the entire debt if the primary borrower defaults and the other guarantors are unable to pay. Franchisees should carefully consider the financial stability and risk tolerance of all parties involved in the guarantee before entering into such an agreement.
It is also important to note that the guarantee remains in effect even if a guarantor ceases to be a member of the Continuity Group, a 10% Owner, or own any direct or indirect interest in Developer or any of the Franchised Restaurants, unless Hardees, in its sole discretion, provides a written release. A release of one guarantor does not affect the obligations of any other guarantor.