In the Hck Hot Chicken franchise agreement, what is the definition of 'Obligations' that the Guarantor is responsible for?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Guarantor's obligations are defined within the Continuing Guaranty agreement. The Guarantor is responsible for guaranteeing the franchisee's full and prompt payment and performance of all obligations to Hck Hot Chicken and its affiliates. These obligations encompass all debts, duties, and liabilities arising from the Franchise Agreement and related documents. This includes both current and future, direct and indirect, absolute and contingent financial and operational responsibilities.
Specifically, the obligations include those under the Franchise Agreement itself, as well as any documents, instruments, and agreements connected to it or the guaranty. These obligations are considered collectively as "Obligations" and cover all documents that evidence or secure any of these responsibilities. The Continuing Guaranty emphasizes that it is a guaranty of payment and performance, meaning the Guarantor is immediately responsible for ensuring the franchisee meets all requirements, rather than only being liable after collection efforts have been exhausted.
In the event the franchisee defaults on any payment or performance obligations, the Guarantor must fulfill those obligations upon demand by Hck Hot Chicken. Furthermore, the Guarantor is responsible for covering all expenses, including reasonable attorney's fees, incurred by Hck Hot Chicken in its efforts to collect on the obligations or enforce the Continuing Guaranty. This ensures that Hck Hot Chicken can recover any costs associated with enforcing the agreement against the Guarantor.