In the Jack In The Box Guaranty, what document's obligations are being assumed?
Jack_In_The_Box Franchise · 2025 FDDAnswer from 2025 FDD Document
In consideration of, and as an inducement to, the execution of the abovementioned Jack in the Box® Development Agreement (the "Agreement") by Different Rules, LLC ("Company"), each of the undersigned and any other parties who sign counterparts of this guaranty (referred to herein individually as a "Guarantor" and collectively as "Guarantors") hereby personally and unconditionally: (a) guarantees to Company, and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that Developer shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement; and (b) agrees to be personally bound by, and personally liable for the breach of, each and every provision in the Agreement, both monetary obligations and other obligations, including without limitation, the obligation to pay costs and legal fees as provided in the Agreement and the obligation to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities, including without limitation the provisions of the Agreement relating to competitive activities.
Source: Item 22 — CONTRACTS (FDD page 94)
What This Means (2025 FDD)
According to the 2025 Jack In The Box Franchise Disclosure Document, the Guaranty included in the Development Agreement ensures that the Developer (franchisee) will fulfill all obligations outlined in the Jack in the Box® Development Agreement.
Specifically, the Guarantor (likely a principal of the franchisee entity) guarantees that the Developer will punctually pay and perform every undertaking, agreement, and covenant detailed in the Development Agreement. This encompasses both monetary obligations, such as payments and fees, and non-monetary obligations, including adhering to specific actions or refraining from certain activities, such as those related to competitive activities as defined in the Development Agreement.
The Guarantor also agrees to be personally bound by and liable for any breaches of the Development Agreement. This personal guarantee extends for the entire term of the Development Agreement and even beyond, as specified within the agreement itself. This means that the personal assets of the guarantor are at risk should the Jack In The Box franchisee fail to meet their obligations under the Development Agreement.