What criteria must the transferee meet to the satisfaction of Buona for a franchise transfer?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
e transferred. All accounts payable and other monetary obligations to Franchisor and its Affiliates shall be paid in full;
(b) Franchisee shall have agreed to remain obligated under the covenants contained in Article XIV hereof as if this Agreement had been terminated on the date of the transfer;
(c) The transferee must be of good moral character and reputation, in the reasonable judgment of Franchisor;
(d) Franchisor shall have determined, to its satisfaction, that the transferee's qualifications meet Franchisor's then-current criteria for new franchisees;
(e) The terms and conditions of the proposed transfer, including all financial terms of the proposed transfer, shall be provided in writing to Franchisor at least fifteen (15) business days prior to the proposed effective date of the transfer, and shall be approved in writing by Franchisor;
(f) The transferee shall execute, at Franchisor's option, (i) written assignment, in form satisfactory to Franchisor, pursuant to which the transferee shall assume all of the obligations of Franchisee under this Agreement and any other agreement relating to the Franchised Business to be transferred; or (ii) Franchisor's then-current form of dual brand Franchise Agreement and such other then-current ancillary agreements as Franchisor may reasonably require. The then-current form of the Franchise Agreement may contain new or significantly different terms, including but not limited to a higher royalty fee and advertising fund contribution and less territorial protection than contained in this Agreement. The then-current form of the Franchise Agreement will expire on the expiration date of this Agreement and will contain the same renewal rights, if any, as are available to Franchisee under this Agreement;
(g) Franchisee shall execute a general release in favor of Franchisor and its Affiliates of any claims it may have against Franchisor and its Affiliates, or their shareholders, officers, directors, members, managers, employees and agents, predecessors, successors and assigns relating to the Franchised Business, unconditionally releasing them from any and all claims Franchisee might have against Franchisor and its Affiliates, or their shareholders, officers, directors, members, managers, employees and agents, predecessors, successor and assigns, as of the date of the assignment;
(h) The transferee shall agree at its sole cost and expense, to complete a Franchised Business Renovation, within the time frame required by Franchisor, unless a Franchised Business Renovation was completed less than five (5) years prior to the date of the transfer, and perform such other scope of work as may be determined by Franchisor;
(i) The transferee and such other individuals as may be designated by Franchisor in the Manuals or otherwise in writing, must have successfully completed the training courses then in effect for new franchisees which will be covered by the Transfer Fee paid. However, the Transferee shall be responsible for payment for any onsite training fees incurred for onsite training conducted by Franchisor after the transfer;
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee looking to transfer their franchise must ensure the proposed transferee meets several conditions to gain Buona's approval. These conditions cover various aspects, including the transferee's character, qualifications, financial obligations, and agreement to adhere to the current franchise terms.
Specifically, the transferee must be of good moral character and reputation, as judged reasonably by Buona. The transferee's qualifications must also meet Buona's then-current criteria for new franchisees. The terms and conditions of the proposed transfer, including all financial terms, must be provided in writing to Buona at least fifteen business days before the proposed effective date and must receive written approval from Buona. The transferee may be required to execute a written assignment or Buona's then-current form of Franchise Agreement, which could contain new or significantly different terms, such as higher royalty fees or advertising fund contributions, and potentially less territorial protection.
Furthermore, the transferee must agree, at their sole cost and expense, to complete a Franchised Business Renovation within the timeframe required by Buona, unless a renovation was completed less than five years before the transfer date. The transferee and any individuals designated by Buona must successfully complete the training courses then in effect for new franchisees, covered by the transfer fee. The transferee's entity's operating agreement must also stipulate that further assignments or transfers of any interest in the entity are subject to all restrictions imposed upon assignments and transfers in the Franchise Agreement.
Finally, the transferee must obtain an assignment of the existing lease with the lessor's written consent or execute a new lease for the premises of the Franchised Business. The remaining term of the assigned lease or the term of the new lease, plus any renewals, must equal the franchise term. Meeting these conditions is crucial for a smooth and approved transfer of a Buona franchise.