In the context of the Buona Guaranty, what does the term 'Guarantor' refer to?

According to Buona's 2025 Franchise Disclosure Document, the term 'Guarantor' refers to each individual or entity that signs the Guaranty. This means that anyone who signs the Guaranty agreement is legally bound to fulfill the obligations outlined within it.

For a prospective Buona franchisee, this definition is crucial because it clarifies who is responsible for upholding the financial or contractual commitments if the franchisee fails to do so. Often, this includes the franchisee themselves, especially if the franchise is owned by a corporate entity. It can also include other individuals, such as family members or business partners, who are willing to guarantee the franchisee's obligations.

The Guarantor's obligations are separate from the Franchise Agreement, meaning the Guarantor's responsibilities are direct and primary, regardless of the validity or enforceability of the Franchise Agreement. This indicates that even if the Franchise Agreement has issues, the Guarantor is still responsible for fulfilling their obligations under the Guaranty. Buona may pursue action against the Guarantor directly should the franchisee default.

Prospective franchisees should carefully consider the implications of signing a Guaranty, as it can have significant financial and legal consequences. It is advisable to seek legal counsel to fully understand the obligations and potential risks associated with being a Guarantor for a Buona franchise.