What benefit does the Guarantor waive regarding the Guaranteed Obligations to Stretch Zone?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guarantor waives the benefit of any circumstance, defense or statute of limitations affecting
his liability that might otherwise discharge a guarantor or hinder prompt enforcement of this Guaranty. The Guarantor irrevocably waives any requirement that the Franchisor must proceed against or exhaust any collateral or security that the Franchisor may now hold or obtain for any of the Guaranteed Obligations before collecting from the Guarantor. The Franchisor is under no obligation to keep the Guarantor informed of the Franchisee's financial condition.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, the Guarantor waives certain rights and protections related to the Guaranteed Obligations. Specifically, the Guarantor waives the benefit of any circumstance, defense, or statute of limitations that might otherwise discharge a guarantor or hinder prompt enforcement of the Guaranty. This means the Guarantor remains liable even if certain legal defenses or time limits would typically protect them.
Additionally, the Guarantor irrevocably waives any requirement that Stretch Zone must first proceed against or exhaust any collateral or security the company may hold for the Guaranteed Obligations before seeking payment from the Guarantor. In other words, Stretch Zone can pursue the Guarantor directly without having to first try to recover the debt from the franchisee or any assets securing the debt.
Finally, Stretch Zone is under no obligation to keep the Guarantor informed of the Franchisee's financial condition. This means the Guarantor is responsible for staying informed about the financial health of the franchisee independently, as Stretch Zone has no duty to provide such information.