According to the Buona franchise agreement, what is the definition of 'Improvements'?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
To secure the payment and performance by Debtor of all obligations and liabilities under the Franchise Agreement (such payment and performance of such obligations and liabilities collectively, "Obligations"), Debtor shall and hereby does grant, convey, assign and transfer to Secured Party, a security interest in and to the Franchise Agreement and all signs and other appurtenances and other property, real and personal, bearing any of the Proprietary Marks used at, located on or affixed to the Franchised Business operated by Debtor ("Buona Restaurant"), and all equipment, fixtures, furnishings and improvements located at the Buona Restaurant, whether now owned or hereafter acquired by Debtor (the "Collateral").
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the term 'improvements' is used within the context of a security agreement. Specifically, it refers to any enhancements or additions made to the Buona Restaurant location.
The franchise agreement states that to secure the franchisee's obligations, the franchisee grants Buona a security interest in the franchise agreement itself, all signs and property bearing Buona's trademarks, and all equipment, fixtures, furnishings, and improvements located at the Buona Restaurant. This indicates that 'improvements' are considered part of the collateral that Buona can claim in the event the franchisee fails to meet their obligations under the franchise agreement.
For a prospective franchisee, this means that any investment made in upgrading or modifying the restaurant space, such as new flooring, lighting, or built-in structures, becomes subject to Buona's security interest. It is important for franchisees to understand that these improvements, while increasing the value of their business, also increase the value of the collateral that Buona can claim in case of default. Franchisees should carefully consider the financial implications of any planned improvements and ensure they are in compliance with the franchise agreement to avoid potential issues.