What representations and warranties does the Guarantor make to Buona regarding the Guaranty?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Guarantor makes several representations and warranties to Buona. These assurances are designed to protect Buona's interests and ensure the enforceability of the Guaranty. The Guarantor confirms that no external agreements limit the terms of the Guaranty and acknowledges that Buona relies on the Guaranty to execute the Franchise Agreement with the franchisee. This highlights the critical role the Guaranty plays in Buona's decision to grant a franchise.
The Guarantor also warrants that they will not dispose of assets in a way that would negatively impact their ability to fulfill their obligations under the Guaranty or the Franchise Agreement without Buona's prior written consent. Furthermore, the Guarantor confirms that the execution and delivery of the Guaranty does not violate any laws or agreements they are party to, nor does it create any liens on their property. This ensures that the Guarantor has the legal capacity and financial stability to support the franchisee's obligations.
Buona makes no representations to the Guarantor regarding the franchisee's creditworthiness, and the Guarantor affirms that they have established their own means of staying informed about the franchisee's financial condition. This places the responsibility on the Guarantor to independently assess and monitor the franchisee's financial health. The Guarantor also agrees to remain informed about any factors that could affect their risks under the Guaranty. Buona is not obligated to disclose information about the franchisee unless specifically requested by the Guarantor. This underscores the importance of the Guarantor's active involvement in monitoring the franchisee's performance and financial status.