What is the relationship between the obligations of the Monicals Pizza Franchisee and the Guarantor?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
eement.
The obligations of Guarantor herein shall be co-extensive with those of Franchisee under the Franchise Agreement and each Related Agreement and shall remain in effect as long as Franchisee's obligations under the Franchise Agreement and each Related Agreement are in effect. This Guaranty Agreement is absolute and unconditional and shall continue without being affected by any impairment, release or limitation of the liability of Franchisee or its estate in bankruptcy resulting from the operation of any present or future provision of the Bankruptcy Code of the United States or from the decision of any court interpreting the same. Guarantor further agrees to be bound by each and every obligation of Franchisee under the Franchise Agreement and each Related Agreement, with
the same force and effect as if Guarantor were designated in and had executed the Franchise Agreement and each Related Agreement as Franchisee thereunder.
This Guaranty Agreement is a primary guaranty of payment and performance and shall not be subject to any counterclaim, set-off, deduction or defense. No failure or delay on the part of Franchisor or any Affiliate in exercising any right or remedy under the Franchise Agreement, any Related Agreement and/or this Guaranty Agreement shall operate as a waiver thereof nor shall a single or partial exercise of any right or remedy preclude any other or further exercise thereof, and all rights and remedies of Franchisor and each Affiliate hereunder and under the Franchise Agreement and each Related Agreement shall be cumulative. Until all Franchisee's obligations under the Franchisee Agreement and each Related Agreement are fully performed, Guarantor waives any rights that it may have against Franchise or any Affiliate by reason of Guarantor's compliance with the Guaranty Agreement, and subordinates any liability or indebtedness of Franchisee held by Guarantor to the obligations of Franchisee to Franchisor and each Affiliate under the Franchise Agreement and each Related Agreement.
If Guarantor consists of more than one person and/or entity, (a) this Guaranty Agreement shall be binding on all of them jointly and severally, and (b) notice to or from any of them will constitute notice to or from each of them.
Any notice or other communication to Franchisor may be addressed to Monical Pizza Corporation, 530 N. Bradley Blvd., Bradley, Illinois, 60915, Attention: President, or such other address as may be designated by Franchisor by registered or certified mail, return receipt requested, and the time of rendition of such notice or other communication shall be when it is deposited in an official United States Mail receptacle, postage prepaid.
This Guaranty Agreement, which is to be governed by and construed in accordance with the laws of the State of Illinois, shall also bind Guarantor's legal or personal representatives, heirs, successors and assigns (as the case may be) and inure to the benefit of Franchisor and its Affiliates and their successors and assigns and any other person or entity at any time having the rights of Franchisor or any Affiliate under the Franchise Agreement and each Related Agreement.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the obligations of the Guarantor are co-extensive with those of the Franchisee under the Franchise Agreement and each Related Agreement. This means the Guarantor's obligations remain in effect as long as the Franchisee's obligations are in effect. The Guaranty Agreement is absolute and unconditional, and it is not affected by any impairment, release, or limitation of the Franchisee's liability, including bankruptcy. The Guarantor agrees to be bound by every obligation of the Franchisee as if the Guarantor had signed the Franchise Agreement and each Related Agreement as the Franchisee.
This agreement is a primary guaranty of payment and performance, not subject to counterclaims or defenses. Monicals Pizza's failure or delay in exercising any right or remedy does not act as a waiver, and all rights and remedies are cumulative. The Guarantor waives any rights against the Franchisee and subordinates any liabilities the Franchisee owes to the Guarantor until all of the Franchisee's obligations are fully performed.
If the Guarantor consists of multiple people or entities, the Guaranty Agreement binds them jointly and severally, meaning each is fully responsible. Notice to or from any of them constitutes notice to or from all of them. The Guaranty Agreement is governed by Illinois law and binds the Guarantor's representatives, heirs, successors, and assigns, benefiting Monicals Pizza and its affiliates. The Guarantor must pay Monicals Pizza's attorney's fees for any breach by the Franchisee or enforcement of the Guaranty Agreement, with unpaid sums accruing interest at 18% per annum.
For a prospective Monicals Pizza franchisee, this means that anyone holding a 5% or greater legal or beneficial interest in the franchisee entity will be required to sign an Unlimited Guaranty and Assumption of Obligations. This effectively makes them personally liable for all of the franchisee's obligations under the Franchise Agreement. This is a significant commitment, as the guarantor's personal assets are at risk if the franchise fails to meet its financial or contractual obligations to Monicals Pizza.