What does the Guarantor represent and warrant to the Franchisor regarding representations or agreements for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
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- Guarantor's Representations and Warranties.
Guarantor(s) represents and warrants to Franchisor that: (a) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (b) this Guaranty is executed at Franchisee's request and Franchisor would not execute the Franchise Agreement were it not for the execution and delivery of this Guaranty; (c) Guarantor has not and will not, without the prior written consent of Franchisor, sell, lease, assign, encumber, hypothecate, transfer or otherwise dispose of all, or substantially all, of Guarantor's assets, or any interest therein if any such event would have a material negative effect on Guarantor's ability to perform its obligations under this Guarantor or the Franchise Agreement; (d) neither the execution nor the delivery of this Guaranty, nor compliance with the terms hereof, will conflict with or result in the breach of any law or statute, will constitute a breach or default under any agreement or instrument to which Guarantor may be a party, or will result in the creation or imposition of any charge or lien upon any property or assets of Guarantor; (e) Franchisor has made no representation to Guarantor as to the creditworthiness of Guarantor; and (f) Guarantor has established adequate means of obtaining from Franchisee, on a continuing basis, information regarding Franchisee'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 Franchisee.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the guarantor makes several representations and warranties to Buona. These assurances are crucial for Buona's decision to enter into a franchise agreement. The guarantor confirms that no external agreements or representations alter the terms of the guaranty. This means the guarantor cannot later claim they were promised different or more lenient terms. Buona relies on the guaranty's execution and delivery; without it, Buona would not proceed with the Franchise Agreement.
The guarantor also warrants that they have not and will not dispose of their assets in a way that would negatively impact their ability to fulfill their obligations under the guaranty or the Franchise Agreement, unless they obtain prior written consent from Buona. This protects Buona from the guarantor becoming unable to cover the franchisee's obligations due to asset depletion. Furthermore, the guarantor confirms that their execution and delivery of the Guaranty does not violate any laws or agreements they are currently bound by, nor will it create any charges or liens against their property or assets.
Buona makes no representations to the guarantor regarding the franchisee's creditworthiness, placing the onus on the guarantor to assess the franchisee's financial stability independently. The guarantor must also establish their own means of staying informed about the franchisee's financial condition. This underscores the guarantor's responsibility to monitor the franchisee's ability to meet their financial obligations. The guarantor is expected to remain informed of any events that could affect their risks under the Guaranty. Buona is not obligated to proactively disclose information about the franchisee's financial situation to the guarantor unless the guarantor specifically requests it.