When are costs and attorney's fees due to Buona for enforcement of covenants?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Actual costs incurred by us. | As incurred | You have to reimburse us if we are held liable for claims arising from your operation of the development business or incur costs in defending them. |
| Costs and Attorney's Fees | Actual costs incurred by us. | As incurred | You must reimburse us for costs and attorneys' fees for enforcement of covenants, for obtaining specific performance of injunctive relief, and if we are successful in an action to enforce the Area Development Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees must reimburse Buona for costs and attorney's fees incurred for the enforcement of covenants. These costs become due 'as incurred.' This means that Buona will bill the franchisee for these expenses as they happen during any legal proceedings or actions taken to enforce the franchise agreement's covenants.
This arrangement means a Buona franchisee could face unpredictable and potentially substantial legal expenses if they violate the franchise agreement. Unlike fixed fees, these costs can vary widely depending on the complexity and duration of any enforcement actions. It is important for a prospective franchisee to understand what specific actions could trigger such fees and to assess their potential financial exposure.
Franchisees should carefully review the franchise agreement to understand the covenants and obligations they are agreeing to. They should also maintain open communication with Buona to address any concerns or disputes promptly, to potentially avoid situations that could lead to enforcement actions and the associated legal costs. Understanding the terms and conditions, and maintaining a strong relationship with Buona, can help mitigate the risk of incurring these fees.