Does the Buona franchise agreement allow a franchisee to commence arbitration against Buona with a third party?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Neither party shall commence any arbitration with a third party against the other, or join with any third party in any arbitration involving Franchisor and Franchisee.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchise agreement explicitly prohibits a franchisee from commencing arbitration against Buona with a third party. This restriction ensures that any disputes between Buona and its franchisees are handled directly between the parties involved, maintaining control over the arbitration process.
This limitation on arbitration proceedings means a Buona franchisee cannot involve external entities in a dispute with the franchisor. The franchisee is restricted to resolving disputes solely with Buona through the defined arbitration process. This could be a disadvantage for franchisees who believe that involving a third party might provide a more impartial or effective resolution.
This type of clause is relatively common in franchise agreements, as franchisors often prefer to manage disputes directly to maintain consistency and control. However, prospective franchisees should carefully consider this limitation and its potential impact on their ability to resolve conflicts with Buona. It is important to understand the implications of being unable to seek arbitration jointly with another party against the franchisor.