What form of addendum to lease does Buona require the landlord to execute for my Buona Business?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Once we have approved a site, you will prepare and submit a letter of intent to the landlord for the site and obtain a proposed lease. We must approve the letter of intent for your lease and the lease for your approved site before you execute them. The factors we consider in approving a lease include but are not limited to whether the terms are commercially reasonable based on the current market conditions, the length of the term, and the rights to cure upon default. In addition, a condition of approval of the lease will be the agreement of the landlord to execute our form of Addendum to Lease and Collateral Assignment of Lease that is attached to the Franchise Agreement as Exhibit B, or alternatively providing similar language in the executed lease in a form approved by us. These requirements apply whether the lessor is an unrelated third party or is an affiliate of yours. If the lease is not approved by us, you must locate another site that meets our approval.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–46)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a condition of lease approval is that the landlord agrees to execute Buona's form of Addendum to Lease and Collateral Assignment of Lease, which is included as Exhibit B to the Franchise Agreement. Alternatively, the landlord can provide similar language in the executed lease, but it must be in a form approved by Buona. These requirements apply whether the lessor is an unrelated third party or an affiliate of the franchisee.
This requirement ensures that Buona has certain protections and rights related to the leased property where the franchise will operate. The Addendum to Lease and Collateral Assignment of Lease likely contain provisions that protect Buona's interests in the event of franchisee default or other issues with the lease. This is a fairly standard practice in franchising, as it allows the franchisor to maintain some control over the location of the business and protect their brand.
Prospective franchisees should carefully review Exhibit B of the Franchise Agreement to understand the specific terms of the Addendum to Lease and Collateral Assignment of Lease. It is also important to discuss these requirements with potential landlords early in the leasing process to ensure they are willing to comply. If a landlord is unwilling to execute Buona's standard form, the franchisee will need to work with Buona to ensure that any alternative language in the lease is acceptable. Failure to meet these leasing requirements can result in the disapproval of the site and potential delays in opening the Buona Business.