Can the Monicals Pizza Guarantor be released from their obligations if the Franchise Agreement is modified?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor agrees that (1) its obligations hereunder shall be enforceable against Guarantor without the necessity for any suit or proceedings whatsoever against Franchisee, and without the necessity of any notice of nonpayment, nonperformance or nonobservance or any notice of acceptance of this Guaranty Agreement or any other notice or demand to which Guarantor might otherwise be entitled, all of which Guarantor hereby expressly waives; (2) immediately upon each and every breach or default of the Franchise Agreement or any Related Agreement by Franchisee, whether before or during the term of the Franchise Agreement or any Related Agreement or thereafter (e.g., during any renewal term), without any notice to or demand upon Guarantor, Guarantor will (i) pay to Franchisor or an Affiliate as applicable, the sum or sums in arrears, (ii) pay to Franchisor or an Affiliate, as applicable, all damages, including but not limited to any expenses, costs and fees incurred by Franchisor or an Affiliate, as applicable,, that may be occasioned by Franchisee's nonperformance, and (iii) comply with or perform all terms and conditions of the Franchise Agreement and each Related Agreement; (3) no extension, forbearance or leniency extended by Franchisor or any Affiliate to Franchisee shall wholly or partially discharge Guarantor hereunder, notwithstanding that Guarantor had no notice of any breach or default of the Franchise Agreement or any Related Agreement or of any such leniency, forbearance or extension; (4) Franchisor or an Affiliate, as applicable, and Franchisee, without notice to or consent by Guarantor, may at any time(s) enter into modifications, renewals, extensions, amendments and/or other agreements respecting the Franchise Agreement or any Related Agreement, and Guarantor shall not be wholly or partially released thereby, it being intended that Guarantor shall continue as guarantor with respect to the Franchise Agreement and each Related Agreement as so modified, renewed, extended, amended or otherwise affected and notwithstanding any transfer or assignment of the Franchise Agreement or any Related Agreement.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the Guarantor is not released from their obligations if the Franchise Agreement is modified. The Guarantor agrees that Monicals Pizza and the Franchisee can enter into modifications, renewals, extensions, amendments and/or other agreements regarding the Franchise Agreement without notice to or consent by the Guarantor.
The FDD states that the Guarantor will continue to act as guarantor with respect to the Franchise Agreement, even if it is modified, renewed, extended, amended, or otherwise affected. This also applies if the Franchise Agreement is transferred or assigned.
This means that if a prospective Monicals Pizza franchisee requires a guarantor, that guarantor remains responsible for the franchisee's obligations even if the original agreement changes. The guarantor should be aware that their obligations persist through any modifications to the franchise agreement.