What is waived by the Kidokinetics Guarantor regarding the Guaranteed Obligations?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
This Guaranty is irrevocable and unlimited. This Guaranty is an absolute and unconditional continuing guarantee of payment and performance of the Guaranteed Obligations. This Guaranty is not discharged by renewal of any claims guaranteed by this instrument, the suffering of any indulgence to any debtor, extension of time of payment thereof, nor the discharge of Franchisee by bankruptcy, operation of law or otherwise. Presentment, demand, protest, notice of protest and dishonor, notice of default or nonpayment and diligence in collecting any obligation under any agreement between Franchisee and Franchisor are each and all waived by Guarantor and/or acknowledged as inapplicable. Franchisor is not required to pursue any remedy on said Guaranteed Obligations as a condition of the obligation hereunder of Guarantor. Guarantor waives notice of amendment of any agreement between Franchisee and Franchisor and notice of demand for payment by Franchisee. Guarantor further agrees to be bound by any and all amendments and changes to any agreement between Franchisee and Franchisor.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the Guarantor waives several rights and notices related to the Guaranteed Obligations. This includes waiving presentment, demand, protest, notice of protest and dishonor, notice of default or nonpayment, and diligence in collecting any obligation under any agreement between the franchisee and Kidokinetics. The Guarantor also acknowledges that these waivers are applicable, meaning they understand the implications of giving up these rights.
Furthermore, Kidokinetics is not required to pursue any remedy on the Guaranteed Obligations as a condition of the Guarantor's obligation. The Guarantor also waives notice of any amendments to agreements between the franchisee and Kidokinetics, as well as notice of demand for payment by the franchisee. The Guarantor agrees to be bound by any and all amendments and changes to any agreement between the franchisee and Kidokinetics.
In practical terms, this means that if a Kidokinetics franchisee defaults on their obligations, the Guarantor cannot insist that Kidokinetics first try to collect from the franchisee or provide specific notices before pursuing the Guarantor. The Guarantor's liability is direct and immediate. This is a significant commitment, as the Guarantor is essentially stepping in to ensure the franchisee's obligations are met, regardless of any changes to the original agreement or attempts to collect from the franchisee first.
This type of guarantee is common in franchising, as it provides the franchisor with added security that the franchisee's obligations will be fulfilled. However, it places a substantial burden on the Guarantor, who should fully understand the scope of the obligations they are guaranteeing and the rights they are waiving. Prospective Kidokinetics franchisees should carefully review the Guaranty and Confidentiality and Non-Compete Agreement (Attachments E and F) with legal counsel to fully understand the implications.