Under the Hardees guarantee, what right is waived regarding requiring an action be brought against Franchisee or any other person?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Each of the undersigned waives: (1) acceptance and notice of acceptance by HR of the foregoing undertakings; (2) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (4) any right he may have to require that an action be brought against Franchisee or any other person as a condition of liability; (5) all rights to payments and claims for reimbursement or subrogation which any of the undersigned may have against Franchisee arising as a result of the execution of and performance under this Guarantee by the undersigned; (6) any law or statute which requires that HR make demand upon, assert claims against or collect from Franchisee or any others, foreclose any security interest, sell collateral, exhaust any remedies or take any other action against Franchisee or any others prior to making any demand upon, collecting from or taking any action against the undersigned with respect to this Guarantee; (7) any and all other notices and legal or equitable defenses to which he may be entitled; and (8) any and all right to have any legal action under this Guarantee decided by a jury.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, under the general terms and conditions of the guarantee, the guarantor waives any right to require that Hardees bring an action against the franchisee or any other person as a condition of liability. This means that Hardees can pursue the guarantor directly without first having to sue the franchisee or any other party involved. This waiver is part of a broader set of waivers that the guarantor agrees to, which also includes waiving notices of acceptance, demand for payment, and default.
For a prospective Hardees franchisee, this is important because it outlines the extent of the guarantor's obligations and the potential liabilities they face. If a franchisee defaults on their obligations, Hardees can immediately seek recourse from the guarantor without needing to exhaust other legal avenues first. This can expedite the recovery process for Hardees and potentially increase the pressure on the guarantor to ensure the franchisee's compliance.
This type of guarantee and waiver is common in franchising, as it provides the franchisor with additional security and recourse in case of franchisee default. It is crucial for anyone considering acting as a guarantor for a Hardees franchise to fully understand the implications of these waivers and the potential financial risks involved. They should seek legal counsel to assess their obligations and liabilities before signing the guarantee.