factual

What article contains the covenants that the franchisee remains obligated to after a Buona franchise transfer?

Buona Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (b) Franchisee shall have agreed to remain obligated under the covenants contained in Article XIV hereof as if this Agreement had been terminated on the date of the transfer;

Source: Item 22 — CONTRACTS (FDD page 78)

What This Means (2025 FDD)

According to Buona's 2025 Franchise Disclosure Document, a franchisee who transfers their franchise must still adhere to the covenants outlined in Article XIV of the franchise agreement. Specifically, Item 22 outlines the conditions of consent for a franchise transfer. One of these conditions is that the franchisee agrees to remain obligated under the covenants contained in Article XIV as if the agreement had been terminated on the date of the transfer.

This means that even after a Buona franchisee sells or transfers their business, they are still responsible for upholding certain obligations. These obligations typically relate to maintaining confidentiality, non-competition, and protecting Buona's brand and reputation.

For a prospective franchisee, this condition highlights the importance of understanding and complying with all terms of the franchise agreement, even after transferring the business. Failure to comply with these post-transfer covenants could result in legal action or financial penalties, even after the franchisee has relinquished ownership of the Buona franchise.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.