In the event of a dispute with Buona, what is the first step required before initiating litigation?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
24.1 Mediation. Except as otherwise specifically provided herein, prior to the initiation of litigation by either party pursuant to this Agreement, the parties must make a good faith effort to resolve any controversies between them by non-binding mediation either through a mutually acceptable mediator or through an established mediation service selected by Franchisor (in either case, "Mediator"). Mediation shall take place in the Cook County, Illinois. Prior to mediation, each party involved in mediation shall sign the standard confidentiality agreement reasonably required by Mediator or a confidentiality agreement reasonably required by Franchisor if the Mediator does not have a standard confidentiality agreement. No litigation proceeding may be commenced until the earlier of thirty (30) days from the selection of the Mediator, or the mutual agreement by both parties that mediation has been unsuccessful, or if the notified party fails to respond to the requesting party within thirty (30) days of the delivery of notice requesting mediation. The parties will share equally all fees and expenses of the mediator, and each part shall bear its own costs otherwise. Each party hereby agrees that all statements made in the course of mediation shall be strictly confidential and shall not be disclosed to or shared with any third parties, other than the mediator. Each party also agrees that any documents or data specifically prepared for use in good faith negotiations and/or mediation shall not be disclosed to or shared with any third party except those parties whose presence is necessary to facilitate the mediation process. The parties agree not to make copies of any such documents, and to return them to the other party upon the conclusion of the mediation. Each party agrees and acknowledges that no statements made in, or evidence specifically prepared for mediation shall be admissible for any purpose in any subsequent proceedings.
Notwithstanding the foregoing, Franchisor shall have no obligation to mediate before commencing litigation in the following circumstances: (i) In the event Franchisor seeks the entry of temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to: (a) enforce the provisions of this Agreement relating to Franchisee's use of the Marks and/or your non-disclosure and non-competition obligations under this Agreement; (b) prohibit any act or omission by Franchisee or Franchisee's employees that constitutes a violation of any applicable law, ordinance or regulation, constitutes
a danger to the public, or may impair the goodwill associated with the Marks or cause irreparable harm to Franchise, the System, the Marks and/or other Buona franchises. agree to waive any claims for damages in the event there is a later determination that an injunction or specific performance order was issued improperly; (ii) in the event Franchisor is filing suit to enforce Franchisee's obligations to pay Franchisor under this Agreement and to seek collection of such fees due and owing to Franchisor; and (iii) in the event Franchisee has abandoned the Franchised Business or has lost its right to possess the premises of the Franchised Business so that the Franchised Business is no longer operating.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, before initiating litigation, both parties must first attempt to resolve any controversies through non-binding mediation. This mediation should occur either through a mutually agreed-upon mediator or via an established mediation service selected by Buona. The mediation will be held in Cook County, Illinois.
Prior to the mediation, both parties are required to sign a standard confidentiality agreement, either provided by the mediator or by Buona if the mediator lacks a standard agreement. Litigation cannot commence until at least 30 days have passed since the selection of the mediator, or if both parties mutually agree that the mediation has been unsuccessful. Additionally, litigation is prohibited if the notified party does not respond to the mediation request within 30 days of receiving notice.
The costs and expenses of the mediator will be shared equally between the parties, while each party will bear their own additional costs. All statements made during mediation are to be kept strictly confidential and not disclosed to third parties, except for those necessary to facilitate the mediation process. Documents prepared specifically for the mediation are also subject to these confidentiality rules, with an agreement to return them to the other party upon conclusion of the mediation. It's important to note that any statements made or evidence prepared for mediation are not admissible in any subsequent legal proceedings.
However, Buona is not obligated to participate in mediation before starting litigation if they are seeking temporary or permanent injunctions or specific performance orders to enforce the franchisee's use of the Buona marks, non-disclosure, or non-competition obligations. This also applies if Buona is filing suit to enforce the franchisee's payment obligations or if the franchisee has abandoned the franchised business or lost possession of the premises.