Under what conditions does the Guaranty for Stretch Zone remain in full effect?
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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- 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 the 2025 Stretch Zone FDD, the Guaranty remains in full effect until all Guaranteed Obligations have been satisfied and all amounts due have been paid in full to Stretch Zone or its affiliates. The guarantor's obligation is absolute and unconditional, irrespective of the validity or enforceability of any of the Agreements. This guaranty is described as irrevocable and continuing, securing any amount at any time owing on the Guaranteed Obligations.
The guarantor waives any circumstance, defense, or statute of limitations that might otherwise discharge a guarantor or hinder prompt enforcement of the Guaranty. The guarantor also waives any requirement that Stretch Zone must proceed against or exhaust any collateral or security before collecting from the guarantor. Stretch Zone is under no obligation to keep the guarantor informed of the Developer's financial condition.
In essence, the Guaranty is a comprehensive and enduring commitment, ensuring that Stretch Zone can pursue the guarantor for the franchisee's obligations without being hindered by typical defenses or requirements that might otherwise protect a guarantor. This provides Stretch Zone with a strong assurance of financial security and performance under the franchise agreement.