What specific payments is the Monicals Pizza Guarantor responsible for if the Franchisee defaults?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor will forthwith pay to Franchisor and/or an Affiliate, as applicable, all attorney's fees and disbursements incurred by Franchisor and/or an Affiliate, as applicable, in connection with any breach or default by Franchisee under the Franchise Agreement or any Related Agreement and/or the enforcement of this Guaranty Agreement, in each instance whether or not suit is brought (and if suit is brought, through appeals and collection efforts).
Any sums not paid to Franchisor or any Affiliate when due hereunder will bear interest at the rate of 18% per annum, from the due date until full payment is received by Franchisor or such Affiliate.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the Guarantor plays a crucial role in ensuring financial obligations are met if the franchisee defaults. The Guarantor is responsible for covering all attorney's fees and disbursements incurred by Monicals Pizza or its affiliates related to any breach or default by the franchisee under the Franchise Agreement or any related agreements. This includes enforcement of the Guaranty Agreement, regardless of whether a lawsuit is initiated, and extends through appeals and collection efforts.
Furthermore, any sums not paid when due will accrue interest at a rate of 18% per annum, calculated from the due date until full payment is received by Monicals Pizza or its affiliates. This high-interest rate underscores the importance of timely payments and the potential financial burden on the Guarantor in case of default.
In practical terms, this means that if a Monicals Pizza franchisee fails to meet their financial obligations, the Guarantor is legally bound to cover not only the original debt but also any legal costs and accrued interest. Prospective franchisees and their guarantors should carefully consider these financial responsibilities and ensure they have the resources to meet these obligations in the event of a default.