Is the Guaranty for a Sonesta Select Sonesta Essential franchise continuing and irrevocable during the term of the Agreements?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the undersigned consents and agrees that: (1) his or her direct and immediate liability under this Guaranty will be joint and several, both with Franchisee and among other guarantors; (2) he or she will render any payment or performance required under the Agreements upon demand if Franchisee fails or refuses punctually to do so; (3) this liability will not be contingent or conditioned upon our pursuit of any remedies against Franchisee 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 we may from time to time grant to Franchisee 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 Agreements; (5) this liability will continue unchanged by the occurrence of any bankruptcy with respect to Franchisee or any assignee or successor of Franchisee, and his or her obligations to make payment or render performance in accordance with the terms of this undertaking nor any remedy for enforcement shall be impaired, modified, changed, released or limited in any manner whatsoever by any impairment, modification, change, release or limitation of the liability of Franchisee or its estate in bankruptcy or of any remedy for enforcement, resulting from the operation of any present or future provision of the U.S. Bankruptcy Act or other statute, or from the decision of any court or agency; and (6) at our request, the undersigned shall present updated financial information to us as reasonably necessary to demonstrate his or her ability to satisfy the financial obligations of Franchisee under the Agreements.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Obligations agreement includes specific terms regarding the guarantor's liability. The guarantor's liability is joint and several with the franchisee and among other guarantors. This means that Sonesta Select Sonesta Essential can pursue any guarantor for the full amount of the obligation, regardless of whether the franchisee or other guarantors have paid their share.
The guarantor is obligated to make any payment or performance required under the Agreements upon demand if the franchisee fails to do so. Sonesta Select Sonesta Essential is not required to pursue remedies against the franchisee or any other person before demanding payment or performance from the guarantor. The guarantor's liability will not be diminished or affected by any extensions of time, credit, or other indulgences granted to the franchisee, including partial payments or compromise of claims. These actions do not modify or amend the Guaranty.
The Guaranty is continuing and irrevocable during the term of the Agreements. This means that the guarantor cannot cancel or revoke the Guaranty during the term of the franchise agreement. The guarantor's liability will continue even if the franchisee declares bankruptcy, and the guarantor's obligations will not be impaired or limited by any bankruptcy proceedings. Sonesta Select Sonesta Essential may request updated financial information from the guarantor to demonstrate their ability to satisfy the franchisee's financial obligations under the Agreements.