What is an 'Arrearage Agreement' in the context of a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
This provision does not require Franchisor to waive any payments due from Franchisee or to enter into any Arrearage Agreement.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, an 'Arrearage Agreement' is referenced in the context of defaults. Specifically, a default under any Arrearage Agreement is considered a material default of the Franchise Agreement, regardless of why the franchisee failed to pay the amount specified in the agreement.
This clause does not obligate Buona to waive any payments due from the franchisee or to even enter into an Arrearage Agreement in the first place. This means that while Buona may offer such an agreement to address past-due amounts, they are not required to do so.
For a prospective franchisee, this implies that if you fall behind on payments to Buona, they might offer a structured repayment plan (an Arrearage Agreement). However, they are not obligated to do so, and any failure to adhere to the terms of such an agreement will be considered a serious breach of the franchise agreement, potentially leading to termination.