What costs and expenses are Buona franchisees responsible for covering if a claim arises from their operation of the franchised business?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
see is not Franchisee's employer or an employer of any of Franchisee's employees. In addition, Franchisor is not a joint
employer with Franchisee. Franchisee acknowledges that Franchisor's training, guidance, advice and assistance, Franchisee's obligations under this Agreement and the standards, specifications, policies and procedures required by Franchisor hereunder and in the Manual are imposed not for the purpose of exercising control over Franchisee but rather for the limited purpose of protecting the Marks and Confidential Information, goodwill and brand consistency. The parties acknowledge and agree that Franchisee is solely responsible for the management of the Franchised Business as an independent franchise owner/operator.
19.3 Indemnification.
- (a) Franchisee agrees to defend, indemnify and hold harmless Franchisor and its Affiliates, and their respective officers, directors, members, managers, employees, agents, predecessors, successors and assigns from all claims, demands, losses, damages, liabilities, cost and expenses (including attorneys' fees and expenses of litigation) resulting from, or alleged to have resulted from, or in connection with Franchisee's operation, possession or ownership of the Franchised Business, the Franchised Business premises, or Franchisee's use of the Marks and the System in any manner not in accordance with this Agreement, including but not limited to any claim or action based on or arising out of any injuries, including death, to persons or damage to or destruction of property, sustained or alleged to have been sustained in connection with or to have arisen out of or incidental to the Franchised Business and/or the performance of this Agreement by Franchisee, its shareholders, officers, directors, members, managers, partners, employees, agents, employees, and its subcontractors, their agents and employees or anyone for whose acts they may be liable, regardless of whether or not such claim, demand, damage, loss, liability, cost or expense is caused in whole or in part by the negligence of Franchisor, Franchisor's representatives, or the employees, agents, invitees, or licensees thereof.
- (b) Franchisor shall advise Franchisee in the event Franchisor receives notice that a claim has been or may be filed with respect to a matter covered by this Agreement, and Franchisee shall immediately assume the defense thereof at Franchisee's sole cost and expense. In any event, Franchisor will have the right, through counsel of its choice, to control any matter to the extent it could directly or indirectly affect Franchisor and/or its Affiliates or their officers, directors, employees, agents, successors or assigns. If Franchisee fails to assume such defense, Franchisor may defend, settle, and litigate such action in the manner it deems appropriate and Franchisee shall, immediately upon demand, pay to Franchisor all costs (including attorneys' fees and cost of litigation) incurred by Franchisor in effecting such defense, in addition to any sum which Franchisor may pay by reason of any settlement or judgment against Franchisor.
- (c) Franchisor's right to indemnity hereunder shall exist notwithstanding that joint or several liabilities may be imposed upon Franchisor by statute, ordinance, regulation or judicial decision.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are generally responsible for defending, indemnifying, and holding harmless Buona and its affiliates from claims, losses, damages, liabilities, costs, and expenses, including attorney's fees and litigation expenses, that result from the franchisee's operation, possession, or ownership of the franchised business. This includes claims related to the franchisee's use of Buona's marks and system in a manner not aligned with the franchise agreement. These obligations extend to claims arising from injuries, death, or property damage connected to the franchised business, regardless of whether such claims are caused by Buona's negligence.
Buona will notify the franchisee if they receive notice of a claim covered by the agreement, and the franchisee must immediately assume the defense at their own expense. However, Buona retains the right to control any matter that could affect them or their affiliates. If the franchisee fails to assume the defense, Buona can defend, settle, or litigate the action as they see fit, and the franchisee must then pay all costs incurred by Buona, including attorney's fees and litigation costs, in addition to any settlement or judgment amounts.
In legal proceedings involving claims for amounts owed by the franchisee to Buona, or if either party is required to enforce the agreement through judicial proceedings, the prevailing party is entitled to reimbursement of costs and expenses. This includes reasonable accounting and legal fees, expert witness fees, court costs, and other litigation expenses, whether incurred before, during, or in preparation for any legal action. Franchisees are also required to maintain insurance policies, including workers' compensation, employer's liability insurance with limits of $500,000 for each accident and for employee disease, and commercial general liability insurance, to protect both the franchisee and Buona against potential losses and liabilities.