Is a Buona franchisee allowed to offset amounts owed to Buona against monies Buona owes to the franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 25.4 Set Off.
Franchisee shall not be allowed to set off amounts owed to Franchisor or other amounts due hereunder, against any monies owed to Franchisee, nor shall Franchisee in any event withhold any amounts due to any alleged nonperformance by Franchisor hereunder, which right of set off is expressly waived by Franchisee.
Franchisor shall be allowed to set off amounts owed to Franchisee against monies owed to Franchisor by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are not permitted to offset any amounts they owe to Buona against any money Buona owes them. The FDD states that the franchisee expressly waives this right of set off. This means a franchisee cannot withhold payments due to Buona, even if they believe Buona has not performed its obligations.
However, the FDD indicates that Buona retains the right to offset any amounts it owes to the franchisee against any debts the franchisee owes to Buona. This creates an imbalance in the contractual relationship, favoring Buona.
This type of clause is not uncommon in franchise agreements, as it protects the franchisor's revenue stream and ensures consistent payments. However, prospective Buona franchisees should be aware of this clause and understand that they must resolve any disputes separately without withholding payments. Franchisees should seek legal counsel to fully understand the implications of waiving their right to set off and to negotiate more balanced terms if possible.