Does the Management Recruiters Guaranty Agreement survive the termination of the Franchise Agreement?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
This Agreement shall not affect in any manner the right of Franchisor to terminate the Franchise Agreement pursuant to the terms thereof and this guaranty shall survive the termination, expiration, or cancellation of the Franchise Agreement. Franchisor may, at its option, elect to take no action pursuant to this guaranty or the franchise agreement without waiving any rights under either. The undersigned do further agree that it will not be necessary for Franchisor, in order to enforce the terms of this Agreement against them, to first institute suit or exhaust its remedies against the Franchisee or any others. The foregoing guaranty shall be non-revocable, except with the express written consent of the Franchisor.
The undersigned, if more than one, shall be jointly and severally liable hereunder and the term "undersigned" shall mean the undersigned or any one or more of them. Anyone signing this guaranty shall be bound thereto at any time. Any married person who signs this guaranty hereby expressly agrees that recourse may be had against him or her separate property for all obligations under this guaranty.
This guaranty shall bind and inure to the benefit of the heirs, executors, administrators, successors and assigns of Franchisor and the undersigned. This agreement in the possession of
the Franchisor will be presumed that same has been executed and delivered by each of the undersigned for a valuable consideration.
Source: Item 23 — RECEIPTS (FDD pages 67–327)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the Guaranty Agreement survives the termination, expiration, or cancellation of the Franchise Agreement. This means that even after the franchise agreement ends, the guarantor remains responsible for the franchisee's obligations. The franchisor can choose not to take action on the guaranty or franchise agreement without losing any rights under either agreement.
Furthermore, the guaranty is non-revocable unless Management Recruiters provides express written consent. If there is more than one guarantor, they are jointly and severally liable, meaning each guarantor is fully responsible for the entire debt. The guaranty binds and benefits the heirs, executors, administrators, successors, and assigns of both Management Recruiters and the guarantor.
For a prospective Management Recruiters franchisee, this clause highlights the importance of understanding the Guaranty Agreement fully. Individuals acting as guarantors should be aware that their obligations continue even after the franchise agreement terminates. This could have long-term financial implications, so consulting with a legal professional is advisable before signing the Guaranty Agreement.