For Buona, what agreements are included, without limitation, in the cross-default provisions?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) A default by Franchisee under this Agreement will be deemed a default of all agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates. A default by Franchisee under any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates will be deemed a default under this Agreement. A default by the guarantors of this Agreement or any other agreement of guaranty will be deemed a default of this Agreement. For purposes of clarity, any agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates include, without limitation, any other Franchise Agreement or Area Developer Agreement.
- (b) If this Agreement is terminated as a result of a default by Franchisee (or any affiliate of Franchisee), Franchisor or its Affiliates may, at their option, elect to terminate any or all other agreements between Franchisee (or an affiliate of Franchisee) and Franchisor or its Affiliates.
If any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates is terminated as a result of a default by Franchisee (or any affiliate of Franchisee), Franchisor may, at its option, elect to terminate this Agreement.
It is agreed that an incurable or uncured default under this Agreement or any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates will be grounds for termination of this Agreement and/or all agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates without additional notice or opportunity to cure.
- 16.6 Arrearage Agreement.
Notwithstanding anything to the contrary set forth in this Agreement, Franchisee hereby acknowledges that any agreement between Franchisee and Franchisor or its Affiliates relating to past due amounts accruing hereunder (an "Arrearage Agreement"), including but not limited to any promissory note, payment plan or amendment to this Agreement shall be deemed to be a material part of this Agreement and shall be incorporated herein by reference.
A default under any Arrearage Agreement shall be deemed a material default of this Agreement, regardless of the reason Franchisee fails to pay the amount that is the subject of an Arrearage Agreement.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a default by a franchisee under the Franchise Agreement is considered a default across all agreements between the franchisee (or their affiliates) and Buona (or its affiliates). Similarly, a default by the franchisee under any other agreement with Buona triggers a default under the Franchise Agreement. This also applies to defaults by guarantors of the Franchise Agreement or any other guaranty agreement.
Specifically, the agreements subject to these cross-default provisions include, without limitation, any other Franchise Agreement or Area Developer Agreement. This means that if a Buona franchisee has multiple franchise agreements with Buona and defaults on one, Buona can consider that a default on all the franchise agreements.
Furthermore, if the Franchise Agreement is terminated due to a franchisee's default, Buona has the option to terminate any or all other agreements with the franchisee or their affiliates. Conversely, if any other agreement between the franchisee and Buona is terminated due to a default, Buona can choose to terminate the Franchise Agreement. This creates a significant risk for franchisees, as a default under one agreement can have cascading consequences across their entire relationship with Buona.
Additionally, any agreement between the franchisee and Buona or its affiliates relating to past due amounts, including promissory notes, payment plans, or amendments to the Franchise Agreement (referred to as an "Arrearage Agreement"), is considered a material part of the Franchise Agreement. A default under any Arrearage Agreement is deemed a material default of the Franchise Agreement, regardless of the reason for the failure to pay. This highlights the importance of maintaining good financial standing with Buona, as any financial misstep can trigger a default with serious repercussions.