Is the Red Wagon Club Guaranty irrevocable during the term of the agreement?
Red_Wagon_Club Franchise · 2024 FDDAnswer from 2024 FDD Document
Each Guarantor consents and agrees that: (1) Guarantor's direct and immediate liability under this Guaranty will be joint and several, both with Franchise Owner and among other guarantors; (2) Guarantor will render any payment or performance required under the Agreement upon demand if Franchise Owner fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon Franchisor's pursuit of any remedies against Franchise Owner or any other person; (4) this liability will not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which Franchisor may from time to time grant to Franchise Owner or to any other person, including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which will in any way modify or amend this Guaranty, which will be continuing and irrevocable during the term of the Agreement; and (5) at Franchisor's request, each Guarantor shall present updated financial information to Franchisor as reasonably necessary to demonstrate such Guarantor's ability to satisfy the financial obligations of Franchise Owner under the Agreement.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2024 FDD)
According to the 2024 Red Wagon Club Franchise Disclosure Document, the Guaranty signed by each Guarantor is continuing and irrevocable during the term of the Franchise Agreement. This means that the Guarantor's obligation to ensure the Franchise Owner fulfills their obligations under the Franchise Agreement remains in effect throughout the entire term of the agreement and cannot be revoked or canceled during this period.
Specifically, each Guarantor consents and agrees that their liability under the Guaranty will be joint and several with the Franchise Owner and other guarantors. This means that Red Wagon Club can pursue any Guarantor for the full amount of the obligations if the Franchise Owner fails to meet them. The Guarantor's liability is not contingent on Red Wagon Club first pursuing remedies against the Franchise Owner or any other person.
Furthermore, the Guaranty remains in effect even if Red Wagon Club grants extensions of time, credit, or other indulgences to the Franchise Owner. The acceptance of partial payments or the compromise or release of claims will not modify or amend the Guaranty. This underscores the strength and permanence of the Guarantor's commitment to ensuring the Franchise Owner's compliance with the Franchise Agreement throughout its term with Red Wagon Club.