For Jersey Mikes, is the Guaranty affected by any other agreement held by the Holder?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
| 1. | In consideration of, and as an inducement to, the execution of the Note of even date herewith (the |
|---|---|
| "Note") by Jersey Mike's Franchise Systems, LLC ("Holder"), [] (the | |
| "Guarantors") hereby personally and unconditionally guarantee the punctual payment when due of | |
| all obligations of [] (the "Maker") to Holder now or hereafter existing under the | |
| Note, whether for principal, interest, fees or otherwise (such obligations, the "Indebtedness", and | |
| such guaranty, the "Guaranty"). Maker and Holder acknowledge and agree that the e xecution of | |
| this Guaranty by the Guarantors is a material inducement to Holder to execute the Note and that | |
| Holder would not have executed the Note without this Guaranty. | |
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to the 2025 Jersey Mike's Franchise Disclosure Document, the Guaranty is connected to the execution of the Note. The Guarantors, as stated in the exhibit, personally and unconditionally guarantee the punctual payment of all obligations of the Maker to the Holder (Jersey Mike's Franchise Systems, LLC) under the Note. This includes principal, interest, fees, or other debts. The Maker and Holder both acknowledge that the Guaranty is a material inducement for the Holder to execute the Note, and the Holder would not have executed the Note without this Guaranty.
In simpler terms, this means that if a franchisee (the Maker) takes out a loan (the Note) from Jersey Mike's (the Holder), a Guarantor is guaranteeing that the loan will be repaid on time. This guarantee is a key reason Jersey Mike's is willing to provide the loan. The obligations covered by the Guaranty include not just the original loan amount but also any interest, fees, or other associated costs.
For a prospective Jersey Mike's franchisee, this highlights the importance of understanding the terms of the Note and the Guaranty. If you are considering having someone act as a Guarantor for your loan, they need to be fully aware of the financial commitment they are making. If the franchisee fails to meet their obligations, the Guarantor is legally bound to cover those debts. This arrangement protects Jersey Mike's by ensuring there is a reliable party responsible for repaying the loan, reducing their financial risk.