Is the Mr. Sandless guarantor jointly and severally liable for the Franchisee's obligations?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
| NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows: |
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| The undersigned, as a person with an interest in a Mr. Sandless franchise, agrees to personally and |
| unconditionally guarantee the obligations of Franchisee to Franchisor and shall personally be subject to and |
| bound by all terms, conditions, restrictions and prohibitions contained in the Franchise Agreement |
| including, without limitation, the confidentiality provisions, covenants, and indemnification provisions |
| contained in Sections 12, 18 and 19.4, respectively. Further, the undersigned agrees to personally act as |
| surety for the full and faithful performance of all of the financial obligations, commitments and payments |
| required of the Franchisee in such Franchise Agreement. The undersigned agrees that Franchisor does not |
| have to pursue any remedies it may have against the Franchisee or any other individual guarantor; but, |
| rather, it may proceed directly and primarily against the undersigned with or without joining the Franchisee |
| or other guarantors as principals or as named parties in any such proceeding. The undersigned is jointly |
| and severally liable for such obligations, commitments and payments required of the Franchisee. |
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless Franchise Disclosure Document, the guarantor is indeed jointly and severally liable for the franchisee's obligations. This means that the guarantor is fully responsible for all of the franchisee's debts and commitments under the Franchise Agreement. Mr. Sandless can pursue the guarantor directly for the full amount owed, without first having to seek payment from the franchisee. This is a significant responsibility for the guarantor.
This clause in the Mr. Sandless agreement protects the franchisor by providing an additional avenue for recovering any losses or unpaid fees. It also allows Mr. Sandless to pursue the guarantor without needing to involve the franchisee in legal proceedings, streamlining the process of recovering funds. The guarantor also agrees to be bound by all terms, conditions, restrictions, and prohibitions contained in the Franchise Agreement.
For a prospective Mr. Sandless franchisee, this highlights the importance of carefully considering who will act as the guarantor and ensuring that the guarantor fully understands the extent of their obligations. The guarantor should be financially stable and capable of covering the franchisee's debts if necessary. It is also crucial for the guarantor to thoroughly review the Franchise Agreement and seek legal counsel to fully understand the implications of the guaranty.
Furthermore, if the franchisee is a corporation or limited liability company, all shareholders, members, and managers must sign a Guaranty Agreement, personally agreeing to be bound by the terms of the Agreement and guaranteeing performance of all of the franchisee's obligations. This requirement ensures that individuals with a vested interest in the franchise's success are also personally liable for its financial obligations.