What happens if a lien is outstanding with respect to the Buona Restaurant for thirty (30) days?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.1. Definitions. The term "Event of Default" means the occurrence and continuation of any one (1) or more of the following events:
- (a) any failure of Debtor promptly and faithfully to pay, observe and perform, when due, any of the Obligations;
- (b) if Debtor becomes insolvent, commits an act of bankruptcy, files a voluntary petition in bankruptcy, or an involuntary petition in bankruptcy is filed, or a permanent or temporary receiver or trustee for the Franchised Restaurant, or all or substantially all of the Debtor's property, is appointed by any court and such appointment is not actively opposed through legal action, or Debtor makes an assignment or arrangement for the benefit of creditors, or calls a meeting of creditors, or Debtor makes a written statement to the effect that he or it is unable to pay his or its debts as they become due, or a levy of execution is made upon Debtor, or an attachment or lien outstanding with respect to the Franchised Restaurant for thirty (30) days, unless the attachment or lien is being duly contested in good faith by Debtor and Secured Party is advised in writing
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if an attachment or lien remains outstanding against a Buona Restaurant for 30 days, it constitutes an 'Event of Default.' However, this is conditional. If the franchisee (referred to as 'Debtor' in this context) is actively contesting the attachment or lien in good faith and has informed the 'Secured Party' (presumably Buona) in writing, it does not trigger an Event of Default.
An 'Event of Default' has significant ramifications. It allows the 'Secured Party' to declare all amounts payable immediately due. The 'Secured Party' also has all rights and remedies available to them under the Uniform Commercial Code. This includes the right to enter the Buona Restaurant and remove all collateral.
Buona must provide the franchisee with reasonable notice of any public or private sale or disposition of the collateral. The agreement specifies that a notice mailed to the franchisee's address at least five business days prior to the sale is considered reasonable. The franchisee is responsible for the expenses associated with retaking, holding, and selling the collateral, including reasonable attorney's fees and legal expenses. These rights and remedies are cumulative and do not limit any other rights Buona may have under the law.