Under the Stretch Zone Guaranty, does the Guarantor waive notice of default?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Waiver. The Guarantor irrevocably waives notice of the extension of any Guaranteed Obligation, or of the acceptance of this Guaranty, and protest, presentment, diligence, demand for payment, notice of default, nonpayment or dishonor of any Guaranteed Obligation, and any other notice except as expressly provided in this Guaranty.
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 does waive notice of default under the Guaranty. Specifically, the Guarantor waives notice of default, nonpayment, or dishonor of any Guaranteed Obligation. This means that Stretch Zone is not required to notify the Guarantor if the Franchisee fails to meet their financial obligations or defaults on any other terms of the franchise agreement.
This waiver is part of a broader set of waivers that also includes notice of the extension of any Guaranteed Obligation, acceptance of the Guaranty, protest, presentment, diligence, and demand for payment. The Guarantor is essentially giving up their right to be informed about these specific actions or issues related to the Guaranteed Obligations. The only exception is for notices that are expressly provided for in the Guaranty itself, implying that some specific notices might still be required.
This arrangement benefits Stretch Zone by streamlining the process of enforcing the Guaranty. Without the obligation to provide these notices, Stretch Zone can act more quickly and decisively in the event of a default. However, it places a significant responsibility on the Guarantor to stay informed about the Franchisee's performance and financial situation, as they may be held liable for the Franchisee's debts without prior warning.