Must MICC exhaust other security before enforcing the Springhill Suites By Marriott Guaranty?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22. Joint and Several Obligations. The liabilities and obligations of the Grantors under this Security Agreement shall be joint and several. Each Grantor hereby agrees that this Security Agreement may be enforced by MICC against any Grantor without first resorting to or exhausting any other security or Collateral and without first having, or concurrently seeking, recourse to any other Grantor or any of the Collateral secured by this Security Agreement through foreclosure proceedings, trustee's sale or otherwise.
Source: Item 17 — , "Renewal, Termination, Transfer, and Dispute Resolution," is amended by the addition of the following paragraph(s) at the conclusion of the Item: (FDD pages 285–553)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, MICC (Marriott International Credit Corporation) is not required to exhaust other security or collateral before enforcing the Security Agreement against a Grantor. The agreement explicitly states that MICC can pursue any Grantor without first seeking recourse from other security, collateral, or other Grantors. This means that MICC has the right to enforce the agreement against any individual guarantor without needing to exhaust other options.
This clause provides MICC with a direct and immediate path to recover funds in case of default, enhancing their security. However, it places a significant responsibility on each Grantor, as any one of them could be held liable for the entire obligation, regardless of the availability of other security or guarantors. This arrangement is designed to protect MICC's interests by allowing them to act swiftly and decisively in the event of a default.
For a prospective Springhill Suites By Marriott franchisee, this condition highlights the importance of understanding the full scope of the Security Agreement and the potential financial risks involved. Franchisees should carefully evaluate their own financial capacity and risk tolerance before entering into such an agreement, as they could be held solely responsible for the entire debt, even if other parties are also obligated or if there is collateral available. It is advisable to seek legal counsel to fully understand the implications of this clause and to assess the potential risks and liabilities associated with the guaranty.