What constitutes grounds for Buona to terminate the franchise agreement based on a crime committed by the franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, Franchisor shall have no obligation to mediate before commencing litigation in the following circumstances: (i) In the event Franchisor seeks the entry of temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to: (a) enforce the provisions of this Agreement relating to Franchisee's use of the Marks and/or your non-disclosure and non-competition obligations under this Agreement; (b) prohibit any act or omission by Franchisee or Franchisee's employees that constitutes a violation of any applicable law, ordinance or regulation, constitutes
a danger to the public, or may impair the goodwill associated with the Marks or cause irreparable harm to Franchise, the System, the Marks and/or other Buona franchises. agree to waive any claims for damages in the event there is a later determination that an injunction or specific performance order was issued improperly; (ii) in the event Franchisor is filing suit to enforce Franchisee's obligations to pay Franchisor 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.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
Based on the 2025 Buona Franchise Disclosure Document, Buona can seek injunctions and orders of specific performance from a court if a franchisee or their employees commit an act or omission that violates any applicable law, ordinance, or regulation. This action can be taken without prior mediation.
This is significant for prospective Buona franchisees because it means that any illegal activity, whether directly related to the business or not, could lead to immediate legal action by Buona to protect its brand and the System. The franchisee also agrees to waive any claims for damages if an injunction or specific performance order is later determined to have been issued improperly.
This clause underscores the importance of adhering to all applicable laws and regulations while operating a Buona franchise. It also highlights the potential legal and financial risks associated with non-compliance, as Buona is empowered to take swift action to safeguard its interests and reputation.