Are all principals jointly and severally liable for the performance of the Buona franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 25.5 Joint and Several Liability.
If two or more persons, corporations, partnerships, or other entities or any combination thereof, sign this Agreement, the liability of each shall be joint and several.
All Principals are jointly and severally liable for the performance of Franchisee hereunder.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if the Franchise Agreement is signed by multiple individuals or entities, each party is jointly and severally liable for fulfilling the agreement's obligations. This means that Buona can pursue any one or all of the signing parties to ensure the franchisee's performance under the agreement.
For a prospective Buona franchisee, this clause has significant implications. If the franchise is owned by a partnership or multiple investors, each individual is fully responsible for the entire scope of the franchise's obligations. Buona is not required to split responsibility among the owners but can seek full performance or damages from any or all of them.
This is a common practice in franchising, as it provides the franchisor with added security and recourse in case of default or non-compliance. Franchisees should carefully consider this clause and its implications, especially when entering into a franchise agreement with multiple partners or entities. It is advisable to seek legal counsel to fully understand the extent of the liability and to ensure that all parties involved are aware of their responsibilities.