Can the Franchisor make or approve changes to the Franchise Agreement without lessening the Guarantor's liability under the Guaranty 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 Guarantor authorizes Buona to make or approve changes to the Franchise Agreement without lessening the Guarantor's liability under the Guaranty. This authorization is granted without requiring any prior notice or demand to the Guarantor.
Specifically, the Guarantor allows Buona to compromise, renew, extend, accelerate, or otherwise change the time for payment or other terms of the Franchise Agreement. Buona is also authorized to take and hold security for the payment of amounts due under the Franchise Agreement or the Guaranty. This includes the ability to exchange, enforce, waive, and release any such security, with or without the substitution of new collateral. Furthermore, Buona has the authority to determine how, when, and what application of payments and credits shall be made on amounts due under the Franchise Agreement. Finally, the Guarantor authorizes Buona to assign or transfer the Guaranty, either in whole or in part.
This comprehensive authorization means that a Guarantor's obligations remain in place even if the terms of the franchise agreement are altered, payment schedules are modified, or collateral arrangements are changed. A prospective Buona franchisee should carefully consider the implications of this broad authorization and understand that the Guarantor's liability is designed to remain intact through various changes to the Franchise Agreement.