What is the relationship between the Guaranty and the Franchise Agreement for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Guarantor's Representations and Warranties.
Guarantor(s) represents and warrants to Franchisor that: (a) no representations or agreements of any kind have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (b) this Guaranty is executed at Franchisee's request and Franchisor would not execute the Franchise Agreement were it not for the execution and delivery of this Guaranty; (c) Guarantor has not and will not, without the prior written consent of Franchisor, sell, lease, assign, encumber, hypothecate, transfer or otherwise dispose of all, or substantially all, of Guarantor's assets, or any interest therein if any such event would have a material negative effect on Guarantor's ability to perform its obligations under this Guarantor or the Franchise Agreement; (d) neither the execution nor the delivery of this Guaranty, nor compliance with the terms hereof, will conflict with or result in the breach of any law or statute, will constitute a breach or default under any agreement or instrument to which Guarantor may be a party, or will result in the creation or imposition of any charge or lien upon any property or assets of Guarantor; (e) Franchisor has made no representation to Guarantor as to the creditworthiness of Guarantor; and (f) Guarantor has established adequate means of obtaining from Franchisee, on a continuing basis, information regarding Franchisee's financial condition.
Guarantor agrees to keep adequately informed of any facts, events or circumstances which might in any way affect Guarantor's risks under this Guaranty, and Guarantor further agrees that, absent a request for information from Guarantor, Franchisor shall have no obligation to disclose to Guarantor any information or documents acquired by Franchisor in the course of its relationship with Franchisee.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Franchise Agreement and the Guaranty are closely linked. Buona requires a personal guaranty to ensure the franchisee fulfills their obligations under the Franchise Agreement. Specifically, the guarantor assures Buona that they have not been given any special deals that would weaken the guaranty's terms.
Buona states it would not enter into a Franchise Agreement without the Guaranty being executed and delivered. The guarantor also confirms they won't get rid of their assets if it hurts their ability to meet the Guaranty or the Franchise Agreement terms. The guarantor also states that signing the Guaranty won't break any laws or agreements they're already part of, or create any charges or liens on their property.
The Guaranty ensures that the franchisee's obligations are met, and the guarantor is expected to stay informed about anything that might affect their risk under the Guaranty. Buona isn't required to share information with the guarantor unless the guarantor asks for it. This arrangement protects Buona by providing an additional layer of security for the franchisee's performance and financial responsibilities.