What claims are exempt from the arbitration clause with Buona?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for controversies, disputes or claims related to or based on Developer's use of the Marks or Confidential Information, Developer's compliance with its noncompetition obligations, all controversies, disputes or claims between Franchisor, its affiliates, and their respective owners, officers, directors, agents, employees and attorneys, and Developer (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 Developer or the obligations by and between the parties; or the validity of this Agreement or any other agreement between Franchisor and Developer 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 then-current 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.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, not all disputes are subject to mandatory arbitration. Specifically, controversies, disputes, or claims related to the franchisee's use of Buona's Marks or Confidential Information, and the franchisee's compliance with non-competition obligations are exempt from the arbitration clause. This means that Buona can pursue these specific types of claims against a franchisee in court, rather than through arbitration.
For a prospective Buona franchisee, this is an important distinction. It means that Buona retains the right to directly litigate issues concerning brand protection, misuse of confidential information, and breaches of non-compete agreements. These are critical areas for any franchise system, as they directly impact brand integrity and the competitive landscape.
All other controversies, disputes, or claims between Buona, its affiliates, and their respective owners, officers, directors, agents, employees, and attorneys, and the franchisee (its affiliates and owners and guarantors, if applicable), arising out of or related to the Franchise Agreement or any other agreement between the parties; the parties' rights and obligations under the Franchise Agreement; Buona's relationship with the franchisee or the obligations by and between the parties; or the validity of the Franchise Agreement or any other agreement between Buona and the franchisee or any provision of such agreements, will be submitted to binding Arbitration administered by the American Arbitration Association.
This arbitration will take place in Cook County, Illinois, before a single arbitrator. If a party fails to submit any dispute to binding arbitration following a lawful demand by the opposing party, that party will bear all costs and expenses incurred by the opposing party in compelling arbitration.