What is the Guarantor of a Buona franchise expected to do regarding information about the Franchisee's financial condition?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantor has established adequate means of obtaining from Developer, on a continuing basis, information regarding Developer's financial condition. Guarantor agrees to keep adequately informed of any facts, events or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information from Guarantor, Franchisor shall have no obligation to disclose to Guarantor any information or documents acquired by Franchisor in the course of its relationship with Developer.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a Guarantor must establish and maintain adequate means of obtaining information about the franchisee's financial condition on a continuing basis. This means the guarantor is expected to actively monitor the financial health of the Buona franchisee.
The Guarantor also agrees to stay informed about any facts, events, or circumstances that could affect their risks under the Guaranty. However, Buona has no obligation to disclose any information about the franchisee that it acquires during its relationship with the franchisee, unless the guarantor specifically requests it.
This arrangement places the responsibility on the Guarantor to proactively seek financial information from the franchisee and assess their own risk. It also means that the Guarantor cannot rely on Buona to provide updates or warnings about the franchisee's financial situation unless they specifically ask for it.