What is the due date for the indemnification costs that a Buona franchisee must pay?
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. |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–32)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are responsible for reimbursing Buona for costs incurred if Buona is held liable for claims arising from the franchisee's operation of the business, or for costs Buona incurs in defending against such claims. These indemnification costs are due 'as incurred,' meaning payment is expected when Buona incurs the expense.
This 'as incurred' payment schedule differs from some other fees outlined in the FDD, such as the initial franchise fee of $40,000, which is due upon signing the Franchise Agreement. Similarly, costs related to land acquisition, site work, and building construction are also due 'as incurred.'
For a prospective Buona franchisee, the 'as incurred' nature of indemnification costs means that these expenses could arise unexpectedly and at any point during the franchise term. It is important for franchisees to understand the potential liabilities associated with operating a Buona business and to ensure they have adequate insurance coverage and risk management strategies in place. Franchisees should maintain open communication with Buona regarding any potential claims or legal issues to mitigate potential indemnification costs.