Is arbitration required for disputes related to a Buona franchisee's use of the Marks?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchisor under this Agreement and to seek collection of such fees due and owing to Franchisor; and (iii) in the event Franchisee has abandoned the Franchised Business or has lost its right to possess the premises of the Franchised Business so that the Franchised Business is no longer operating.
24.2 Arbitration. Except for controversies, disputes or claims related to or based on Franchisee's use of the Marks or Confidential Information, Franchisee's compliance with its noncompetition obligations and any rights Franchisor may have to possession of the premises of the Franchised Business under any sublease, lease or collateral assignments, all controversies, disputes or claims between Franchisor, its affiliates, and their respective owners, officers, directors, agents, employees and attorneys, and Franchisee (its affiliates and owners and guarantors, if applicable), arising out of or related to this Agreement or any other agreement between the parties; the parties' rights and obligations under this Agreement; Franchisor's relationship with Franchisee or the obligations by and between the parties; or the validity of this Agreement or any other agreement between Franchisor and Franchisee or any provision of such agreements, will be submitted to binding Arbitration administered by the American Arbitration Association ("AAA") in accordance with the AAA's thencurrent Commercial Arbitration Rules. The arbitration hearing shall take place in Cook County, Illinois, before a single arbitrator. Any party who fails or refuses to submit any dispute to binding arbitration following a lawful demand by the opposing party shall bear all costs and expenses incurred by the opposing party in compelling arbitration. The parties shall have thirty days after the service of a Statement of Claim and demand for arbitration to agree on a single arbitrator.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, arbitration is not required for disputes regarding a franchisee's use of the Marks. Instead, Buona can pursue litigation to enforce the provisions related to the franchisee's use of the Marks. This means that Buona retains the right to take a franchisee directly to court over trademark issues, rather than being obligated to resolve the dispute through arbitration.
This exception to arbitration allows Buona to act quickly to protect its brand and trademarks. Trademark disputes can significantly impact brand reputation and market presence, so the ability to seek immediate injunctive relief or specific performance in court can be crucial. This approach is not uncommon in franchising, as franchisors often prioritize the protection of their intellectual property.
For a prospective Buona franchisee, this means understanding that disputes over the use of Buona's trademarks will be handled through the court system, potentially leading to quicker resolutions but also potentially higher legal costs if a dispute arises. It is important for franchisees to fully understand and comply with the brand standards and trademark usage guidelines outlined in the franchise agreement to avoid such disputes.