Can the Franchisor assign or transfer the Guaranty, in whole or in part, for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor(s) authorizes Franchisor, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (a) to make or approve changes to the Franchise Agreement; (b) to repeatedly compromise, renew, extend, accelerate, or otherwise change the time for payment or other terms of the Franchise Agreement; (c) to take and hold security for the payment of amounts due under the Franchise Agreement or this Guaranty, and exchange, enforce, waive, and release any such security, with or without the substitution of new collateral; (d) to determine how, when, and what application of payments and credits shall be made on amounts due under the Franchise Agreement; and (j) to assign or transfer this Guaranty, in whole or in part.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchisor has the right to assign or transfer the Guaranty, in whole or in part. This means that Buona can transfer its rights under the Guaranty to another party without needing the guarantor's consent.
This clause provides Buona with flexibility in managing its assets and financial arrangements. For a prospective franchisee, this means that the entity to whom the guaranty is owed could change during the term of the franchise agreement. It is important to note that the guarantor's obligations remain unchanged regardless of who holds the Guaranty.
This is a fairly standard provision in franchise agreements, as it allows the franchisor to sell or securitize its franchise portfolio. However, prospective franchisees should carefully review the implications of the Guaranty and understand their obligations, as these will not change if the Guaranty is transferred.