Under the Monicals Pizza Unlimited Guaranty, what is meant by the Guaranty Agreement being 'co-extensive' with the Franchisee's obligations?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to the 2025 Monicals Pizza Franchise Disclosure Document, the Unlimited Guaranty and Assumption of Obligations agreement stipulates that the guarantor's obligations are 'co-extensive' with those of the franchisee. This means the guarantor's responsibilities under the agreement exist for as long as the franchisee's obligations are in effect under the Franchise Agreement and any related agreements. The guaranty remains effective for the entire duration of the franchisee's commitment.
This agreement is absolute and unconditional, meaning it is not affected by any impairment, release, or limitation of the franchisee's liability, including situations like bankruptcy. The guarantor agrees to be bound by every obligation of the franchisee as if the guarantor had originally signed the Franchise Agreement and related agreements as the franchisee. This ensures that Monicals Pizza has recourse to the guarantor for the franchisee's commitments.
The Guaranty Agreement serves as a primary guarantee of payment and performance, meaning it is not subject to any counterclaim, set-off, deduction, or defense. Any delay or failure by Monicals Pizza to exercise its rights or remedies does not act as a waiver of those rights. The rights and remedies available to Monicals Pizza are cumulative, providing them with multiple avenues for recourse. The guarantor also waives any rights they may have against the franchisee and subordinates any debt the franchisee owes them to the obligations the franchisee owes to Monicals Pizza.
For a prospective Monicals Pizza franchisee, this means that anyone holding a 5% or greater legal or beneficial interest in the franchisee entity must sign this guarantee, ensuring they are personally liable for the franchisee's obligations. This is a significant commitment, as it puts the guarantor's personal assets at risk should the franchisee fail to meet their obligations under the Franchise Agreement. Franchisees should ensure that all parties involved fully understand the implications of this Unlimited Guaranty and Assumption of Obligations.