Under what conditions can Buona require the Franchisee to execute a written guarantee of the transferee's obligations?

According to Buona's 2025 Franchise Disclosure Document, Buona has the option to request that a franchisee execute a written guarantee of the transferee's obligations under the Franchise Agreement. This guarantee, if required, will not exceed a period of three years from the date of the transfer.

This condition is part of the overall transfer process, where several requirements must be met before Buona approves the transfer of a franchise. These requirements ensure that the new transferee is qualified and that Buona's interests are protected.

For a prospective Buona franchisee, this means that if they decide to sell their franchise, they might be required to guarantee the new owner's performance for up to three years. This could create a contingent liability for the former franchisee, as they would be responsible if the new owner fails to meet the obligations outlined in the Franchise Agreement. It is important to consider this potential liability when planning an exit strategy from the franchise system.