What agreement obligations does the Franchisee remain under after transferring the Buona franchise?

According to Buona's 2025 Franchise Disclosure Document, a franchisee who transfers their franchise may still have some remaining obligations. Specifically, the franchisee must agree to remain obligated under the covenants contained in Article XIV of the franchise agreement, as if the agreement had been terminated on the date of the transfer.

This means that even after the transfer is complete, the franchisee is still bound by certain restrictions and responsibilities outlined in Article XIV. These likely include non-compete clauses, confidentiality agreements, and other provisions designed to protect Buona's interests. The exact nature of these obligations would be detailed in Article XIV itself.

Additionally, at Buona's option and request, the franchisee may have to execute a written guarantee of the transferee's obligations under the Franchise Agreement. This guarantee cannot exceed three years from the date of the transfer. This means that for up to three years after the transfer, the original franchisee could be held liable if the new franchisee fails to meet their obligations under the agreement.

Prospective franchisees should carefully review Article XIV of the Franchise Agreement and consider the implications of providing a guarantee for the transferee's performance. It is important to understand the full extent of these continuing obligations before deciding to transfer the franchise.