What is the purpose of Exhibit C to the Buona Area Development Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Owners of the Developer, and all such Owners must execute the Guaranty and Assumption of Obligations which is attached hereto as Exhibit C concurrently with the execution of this Agreement by Developer.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Exhibit C to the Area Development Agreement is a Guaranty and Assumption of Obligations. The owners of the entity developing the franchise locations must execute this agreement concurrently with the execution of the Area Development Agreement by the developer.
In essence, this exhibit ensures that the owners of the development entity personally guarantee the obligations of the entity under the Area Development Agreement. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case the development entity fails to meet its obligations.
By requiring a personal guarantee, Buona aims to ensure that the owners are fully committed to the success of the development and are willing to be held personally liable for any breaches of the agreement. This can also help to ensure that the owners have sufficient financial resources to support the development of the franchise locations.