For Jersey Mikes, does the Guaranty impair 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)
Based on the 2025 Jersey Mike's Franchise Disclosure Document, the provided excerpts do not contain specific information regarding whether the Guaranty impairs any other agreement held by the Holder (Jersey Mike's Franchise Systems, LLC). The excerpts do mention the Guaranty and Assumption of Obligations in the context of promissory notes, transfers of development agreements, and franchise agreements, but they do not detail the extent to which the Guaranty might affect other agreements.
Item 22 discusses various contracts, including the Franchise Agreement, Development Agreement, Promissory Note, and Guaranty and Assumption of Obligations. These contracts outline the obligations and rights of both the franchisor and franchisee. The Guaranty ensures the franchisee fulfills their financial obligations to Jersey Mike's. However, the FDD excerpts do not specify if this guarantee has any impact on other agreements the holder might have.
A prospective Jersey Mike's franchisee should seek clarification from the franchisor regarding the potential impact of the Guaranty on any other agreements they may enter into. Specifically, they should ask about any limitations or restrictions the Guaranty places on their ability to engage in other business ventures or financial arrangements. Understanding the full scope of the Guaranty is crucial for making an informed investment decision.
In summary, while the FDD excerpts provide information on the Guaranty's role in securing financial obligations, they lack details on its potential impact on other agreements. Therefore, further due diligence is necessary to fully understand the implications of the Guaranty.