When must the Owners of the Developer execute the Guaranty and Assumption of Obligations for the Buona franchise agreement?

According to Buona's 2025 Franchise Disclosure Document, the Owners of the Developer must execute the Guaranty and Assumption of Obligations concurrently with the execution of the Area Development Agreement by the Developer. This requirement ensures that the Owners personally guarantee the obligations outlined in the Area Development Agreement. The Guaranty and Assumption of Obligations is included as Exhibit C to the Area Development Agreement.

In practical terms, this means that all individuals who own the Developer entity must sign the Guaranty at the same time the Developer signs the Area Development Agreement. This personal guarantee holds the Owners individually responsible for the Developer's commitments under the agreement. Buona requires this to ensure that the Developer is fully committed to fulfilling its obligations, such as developing and operating a minimum number of Buona restaurants.

This is a fairly standard practice in franchising, as franchisors often seek personal guarantees from the owners of franchisee entities, especially when dealing with multi-unit development agreements. The personal guarantee provides Buona with an additional layer of security, as it can pursue the personal assets of the Owners if the Developer fails to meet its obligations. Prospective franchisees should carefully review the Guaranty and Assumption of Obligations to understand the full extent of their personal liability.

It is important for potential Buona developers to understand that this requirement is non-negotiable. All Owners of the Developer entity must be prepared to sign the Guaranty concurrently with the Area Development Agreement. Failure to do so will likely prevent the Developer from entering into the agreement with Buona.