In the Hck Hot Chicken Continuing Guaranty, who does the agreement benefit?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ATTACHMENT C
CONTINUING GUARANTY
FOR VALUE RECEIVED, and in consideration of Hot Chikn Kitchn LLC, a Florida limited liability company ("Franchisor"), [granting a franchise][or][approving a transfer] to [FRANCHISEE], a [STATE ENTITY TYPE] ("Franchisee"), the undersigned, [FRANCHISEE OWNERS] (jointly and severally, "Guarantor"), agree as follows:
1. Guaranty of Obligations.
- 1.1 Guarantor unconditionally, absolutely and irrevocably guarantees the full and prompt payment and performance when due, of all obligations of Franchisee to Franchisor and its affiliates, however created, arising or evidenced, whether direct or indirect, absolute or contingent, or now or in the future existing or due or to become due, including, without limitation, under or in connection with that certain Franchise Agreement dated as of even date herewith (the "Franchise Agreement") and each of the documents, instruments and agreements executed and delivered in connection with the Franchise Agreement or this continuing guaranty, as each may be modified, amended, supplemented or replaced from time to time (all such obligations are referred to collectively as the "Obligations"), and all documents evidencing or securing any of the Obligations.
This continuing guaranty (this "Continuing Guaranty") is a guaranty of payment and performance when due and not of collection.
- 1.2 In the event of any default by Franchisee in making payment of, or default by Franchisee in performance of, any of the Obligations, Guarantor agrees on demand by Franchisor to pay and perform all of the Obligations as are then or thereafter become due and owing or are to be performed under the terms of the Obligations.
Guarantor further agrees to pay all expenses (including reasonable attorneys' fees and expenses) paid or incurred by Franchisor in endeavoring to collect the Obligations, or any part thereof, and in enforcing this Continuing Guaranty.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the Continuing Guaranty agreement is designed to benefit the Franchisor, Hot Chikn Kitchn LLC. Specifically, the agreement ensures that the Guarantor (which is the Franchisee Owners) unconditionally guarantees the full and prompt payment and performance of all obligations of the Franchisee to the Franchisor and its affiliates. This includes obligations arising from the Franchise Agreement and any related documents.
In practical terms, this means that if the Franchisee fails to meet their financial or performance obligations, the Franchisor can seek recourse directly from the Guarantor. This provides Hck Hot Chicken with an added layer of financial security, as the Guarantor is personally liable for the Franchisee's debts and responsibilities. The Guarantor also agrees to cover all expenses, including reasonable attorney's fees, incurred by Hck Hot Chicken in their efforts to collect the obligations or enforce the Continuing Guaranty.
This type of guaranty is common in franchising, as it protects the Franchisor's interests and ensures that there is a responsible party who is committed to fulfilling the Franchisee's obligations. The Continuing Guaranty is a guaranty of payment and performance when due and not of collection. The agreement remains in effect regardless of any modifications or amendments to the Franchise Agreement, further solidifying the Franchisor's protection.