When transferring a Buona franchise, must the franchisee remain obligated under the covenants in Article XIV?

According to Buona's 2025 Franchise Disclosure Document, a franchisee transferring their franchise must agree to remain obligated under the covenants contained in Article XIV as if the Franchise Agreement had been terminated on the date of the transfer. This requirement is one of the conditions that must be met for Buona to approve the transfer.

This means that even after a franchisee sells their Buona franchise, they are still bound by the terms and restrictions outlined in Article XIV. These covenants likely include non-compete clauses, confidentiality agreements, and other obligations designed to protect Buona's interests. The franchisee's obligations continue as if the agreement was terminated on the transfer date.

For a prospective Buona franchisee, this condition highlights the importance of carefully reviewing and understanding Article XIV before signing the Franchise Agreement. It also emphasizes the need to factor in these ongoing obligations when considering a future sale of the franchise. Franchisees should seek legal counsel to fully understand the implications of remaining bound by these covenants after transferring their business.