What documents might the transferee be required to execute at Buona's option?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
sees;
- (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;
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a franchisee transfers their franchise to a new owner (the transferee), Buona has the option to require the transferee to execute certain documents. These documents include a written assignment where the transferee assumes all of the franchisee's obligations under the Franchise Agreement and any other agreements related to the franchised business. Alternatively, Buona can require the transferee to sign Buona's then-current form of dual brand Franchise Agreement, along with any other ancillary agreements that Buona deems reasonably necessary.
It is important to note that Buona's then-current Franchise Agreement may have terms that are new or significantly different from the original agreement. These differences could include higher royalty fees, increased advertising fund contributions, and reduced territorial protection. However, the new Franchise Agreement will expire on the same date as the original agreement and will contain the same renewal rights, if any, that were available to the original franchisee.
In addition to the above, the original franchisee must execute a general release in favor of Buona and its affiliates, releasing them from any claims related to the franchised business. Buona may also request that the original franchisee execute a written guarantee of the transferee's obligations under the Franchise Agreement, but this guarantee will not exceed three years from the date of the transfer. These stipulations ensure that Buona maintains control over its franchise system and that the new franchisee is bound by the current standards and obligations.