Does the Buona franchise agreement require the franchisee to acknowledge receipt of the agreement and its exhibits before execution?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
25.11 Acknowledgements.
- (a) FRANCHISEE ACKNOWLEDGES THAT FRANCHISEE HAS RECEIVED A COMPLETED COPY OF THIS AGREEMENT, THE EXHIBITS HERETO, IF ANY, AND THE AGREEMENTS RELATING THERETO, IF ANY, PRIOR TO THE DATE ON WHICH THIS AGREEMENT WAS EXECUTED. FRANCHISEE FURTHER ACKNOWLEDGES THAT FRANCHISEE HAS RECEIVED THE FRANCHISE DISCLOSURE DOCUMENT REQUIRED BY THE TRADE REGULATION RULE OF THE FEDERAL TRADE COMMISSION ENTITLED "DISCLOSURE REQUIREMENTS AND PROHIBITIONS CONCERNING FRANCHISING AND BUSINESS OPPORTUNITY VENTURES" AT LEAST FOURTEEN (14) DAYS PRIOR TO THE DATE ON WHICH THIS AGREEMENT WAS EXECUTED, APPLICABLE BY STATE.
- (b) FRANCHISEE RECOGNIZES AND UNDERSTANDS THAT IT MAY INCUR OTHER EXPENSES AND/OR OBLIGATIONS AS PART OF THE INITIAL INVESTMENT IN THE FRANCHISED BUSINESS WHICH THE TERMS OF THIS AGREEMENT MAY NOT ADDRESS, AND WHICH INCLUDE WITHOUT LIMITATION: OPENING ADVERTISING, EQUIPMENT, FIXTURES, OTHER FIXED ASSETS, CONSTRUCTION, LEASEHOLD IMPROVEMENTS AND DECORATING COSTS AS WELL AS WORKING CAPITAL NECESSARY TO COMMENCE OPERATIONS.
- (c) No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchisee must acknowledge receipt of the franchise agreement and its exhibits before the agreement is executed. Specifically, Section 25.11(a) of the Buona franchise agreement states that the franchisee acknowledges receiving a completed copy of the agreement, any exhibits, and related agreements before the date the agreement is executed. This acknowledgement confirms that the franchisee has had the opportunity to review all relevant documents before entering into the franchise relationship.
In addition to acknowledging receipt of the franchise agreement itself, the franchisee also acknowledges receiving the Franchise Disclosure Document (FDD) as required by the Federal Trade Commission's Trade Regulation Rule. The FDD must be received at least fourteen days before the franchise agreement is executed, or as applicable by state law. This waiting period allows the prospective franchisee time to carefully consider the information provided in the FDD and seek professional advice if needed.
Furthermore, Buona uses a Franchise Acknowledgement Questionnaire to confirm that the franchisee has received and reviewed key documents and information. The questionnaire includes questions about receiving the completed Franchise Agreement and its exhibits, the Franchise Disclosure Document, and, if applicable, the Area Development Agreement. The franchisee must also confirm that they signed a receipt for the Franchise Disclosure Document, identifying the franchise sellers they had discussions with. However, prospective franchisees in California are instructed not to complete this questionnaire.
These acknowledgements are standard practice in franchising, designed to protect both the franchisor and franchisee by ensuring transparency and informed consent. By signing these acknowledgements, the franchisee confirms they have had access to all necessary information and have had sufficient time to review it before making a final decision. However, Section 25.11(c) clarifies that no acknowledgement can waive claims under state franchise law or disclaim reliance on statements made by the franchisor.