What are the 'Guaranteed Obligations' that the Guarantor is responsible for under the Stretch Zone franchise agreement?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
The Guarantor agrees for the benefit of the Franchisor and its affiliates as follows:
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- Guaranteed Obligations. The Guarantor absolutely and unconditionally, guarantees to the Franchisor and its affiliates, and their respective successors and assigns, for the respective terms of the Agreements and thereafter as provided in the Agreements, that the Franchisee will punctually pay and perform every obligation stated in the Agreements, and the Guarantor agrees to be personally bound by, and personally liable for the breach of, every term of the Agreements, together with charges, fees and all expenses, including attorneys' fees and costs incurred in enforcing the terms of the Agreements or this Guaranty through litigation, arbitration, appellate, bankruptcy and post-judgment proceedings (the "Guaranteed Obligations").
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- Incorporation of Terms. The terms of the Agreements are incorporated in this Guaranty as if stated in full, including the covenants stated in ARTICLE 13 and the dispute resolutions provisions stated in ARTICLE 17 of the Franchise Agreement by which Guarantor agrees to be bound. The Guarantor has had an opportunity to read, and to receive advice by his or her counsel of, the terms of the Agreements and the Franchisor's Franchise Disclosure Document.
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- Guaranty Absolute and Irrevocable. The obligation of the Guarantor is absolute and unconditional irrespective of the validity or enforceability of any of the Agreements. This is an irrevocable and continuing guaranty. This Guaranty covers and secures any amount at any time owing on the Guaranteed Obligations and remains in full effect until all Guaranteed Obligations have been satisfied and all amounts due have been paid in full to the Franchisor or its affiliates. The Guarantor waives the benefit of any circumstance, defense or statute of limitations affecting
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's responsibilities, termed 'Guaranteed Obligations,' are extensive and legally binding. The Guarantor is essentially ensuring that the Franchisee (or Developer, depending on the agreement) will fulfill all their duties and financial commitments as outlined in the franchise agreement. This guarantee extends for the entire term of the agreement and beyond, covering any period after the agreement as specified within it.
Specifically, the Guarantor promises that the Franchisee will make all payments punctually and perform every obligation detailed in the Agreements. This includes not only the direct financial obligations like franchise fees and royalties but also adherence to all operational and compliance terms. Furthermore, the Guarantor agrees to be personally bound by and liable for any breach of these terms. This means that if the Franchisee fails to meet any obligation, the Guarantor is stepping in to cover those responsibilities personally.
The 'Guaranteed Obligations' also encompass any charges, fees, and all expenses, including attorneys' fees and costs, that Stretch Zone incurs while enforcing the terms of the Agreements or the Guaranty itself. This includes costs associated with litigation, arbitration, appellate proceedings, bankruptcy proceedings, and any post-judgment actions. The Guarantor's commitment is absolute and unconditional, regardless of the validity or enforceability of the underlying Agreements. This is an irrevocable and continuing guaranty that remains in effect until all Guaranteed Obligations are fully satisfied and all amounts due are paid to Stretch Zone or its affiliates.