Who is the Guaranty and Assumption of Franchisee's Obligations made in consideration of for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS ("Guaranty") | |
|---|---|
| is made as of, 20, in consideration of, and as an inducement to, the | |
| execution of the Franchise Agreement by Chicago's Original Italian Beef Franchising LLC, an Illinois | |
| limited liability company ("Franchisor"). In consideration thereof, each of the undersigned hereby jointly | |
| and severally, personally and unconditionally agrees as follows: | |
| 1. | Guaranty. Guarantor(s) hereby unconditionally and absolutely warrants and guarantees |
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Guaranty and Assumption of Franchisee's Obligations is made in consideration of, and as an inducement to, the execution of the Franchise Agreement by Chicago's Original Italian Beef Franchising LLC, an Illinois limited liability company, which is referred to as the "Franchisor".
In simpler terms, this means that the Guaranty is provided to Buona's franchising entity (Chicago's Original Italian Beef Franchising LLC) to encourage them to enter into a Franchise Agreement with the franchisee. The guarantor(s) agree to ensure that the franchisee fulfills all obligations outlined in the Franchise Agreement.
This arrangement is a common practice in franchising, where the franchisor seeks additional security to ensure the franchisee's compliance with the agreement. By having a guarantor, Buona aims to mitigate the risk of financial loss or non-performance by the franchisee. The guarantor essentially steps in to cover the franchisee's responsibilities if they fail to do so.