What must a Buona franchisee furnish to the franchisor upon execution or any subsequent transfer of the franchise agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
e transferred. All accounts payable and other monetary obligations to Franchisor and its Affiliates shall be paid in full;
(b) Franchisee shall have agreed to remain obligated under the covenants contained in Article XIV hereof as if this Agreement had been terminated on the date of the transfer;
(c) The transferee must be of good moral character and reputation, in the reasonable judgment of Franchisor;
(d) Franchisor shall have determined, to its satisfaction, that the transferee's qualifications meet Franchisor's then-current criteria for new franchisees;
(e) The terms and conditions of the proposed transfer, including all financial terms of the proposed transfer, shall be provided in writing to Franchisor at least fifteen (15) business days prior to the proposed effective date of the transfer, and shall be approved in writing by Franchisor;
(f) The transferee shall execute, at Franchisor's option, (i) written assignment, in form satisfactory to Franchisor, pursuant to which the transferee shall assume all of the obligations of Franchisee under this Agreement and any other agreement relating to the Franchised Business to be transferred; or (ii) Franchisor's then-current form of dual brand Franchise Agreement and such other then-current ancillary agreements as Franchisor may reasonably require. The then-current form of the Franchise Agreement may contain new or significantly different terms, including but not limited to a higher royalty fee and advertising fund contribution and less territorial protection than contained in this Agreement. The then-current form of the Franchise Agreement will expire on the expiration date of this Agreement and will contain the same renewal rights, if any, as are available to Franchisee under this Agreement;
(g) Franchisee shall execute a general release in favor of Franchisor and its Affiliates of any claims it may have against Franchisor and its Affiliates, or their shareholders, officers, directors, members, managers, employees and agents, predecessors, successors and assigns relating to the Franchised Business, unconditionally releasing them from any and all claims Franchisee might have against Franchisor and its Affiliates, or their shareholders, officers, directors, members, managers, employees and agents, predecessors, successor and assigns, as of the date of the assignment;
(h) The transferee shall agree at its sole cost and expense, to complete a Franchised Business Renovation, within the time frame required by Franchisor, unless a Franchised Business Renovation was completed less than five (5) years prior to the date of the transfer, and perform such other scope of work as may be determined by Franchisor;
(i) The transferee and such other individuals as may be designated by Franchisor in the Manuals or otherwise in writing, must have successfully completed the training courses then in effect for new franchisees which will be covered by the Transfer Fee paid. However, the Transferee shall be responsible for payment for any onsite training fees incurred for onsite training conducted by Franchisor after the transfer;
(j) The transferee's Entity's operating agreement, bylaws, partnership agreement or equivalent governing document shall provide that further assignments or transfers of any interest in the Entity are subject to all restrictions imposed upon assignments and transfers in this Agreement;
(k) Franchisee shall, at Franchisor's option and request, execute a written guarantee of the transferee's obligations under this Agreement, which guarantee shall not exceed a period of three (3) years from the date of the transfer;
(l) Transferee obtains an assignment of Franchisee's existing lease with the lessor's written consent or executes a new lease with the lessor for the premises of the Franchised Business and the remaining term of the assigned lease or the term of the new lease plus any renewals equals the franchise term hereunder; and
- (m) Except as provided for in Section 15.4 below, Franchisee shall pay to Franchisor
a transfer fee equal to seventy-five percent (75%) of the then-current Initial Franchise Fee if the Transferee is a new franchisee or fifty percent (50%) of the then-current Initial Franchise Fee if the Transferee is an existing franchisee of Franchisor. The transfer
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee must fulfill several requirements when transferring a franchise agreement. Prior to the transfer, the franchisee must provide the franchisor with the terms and conditions of the proposed transfer in writing, including all financial terms, at least fifteen business days before the proposed effective date. This is to allow Buona to properly assess the transfer.
Additionally, the potential transferee must meet certain qualifications. They must be of good moral character and reputation, in Buona's reasonable judgment, and their qualifications must meet Buona's then-current criteria for new franchisees. The transferee may also be required to complete the training courses then in effect for new franchisees. The franchisee will need to pay a transfer fee equal to 75% of the then-current Initial Franchise Fee if the Transferee is a new franchisee or 50% of the then-current Initial Franchise Fee if the Transferee is an existing franchisee of Buona. A non-refundable deposit of $5,000.00 on the transfer fee is due when the franchisee requests written consent for the proposed transfer.
Furthermore, the transferee may need to execute a written assignment assuming all obligations under the franchise agreement or Buona's then-current form of dual brand Franchise Agreement. The franchisee must also execute a general release in favor of Buona and its affiliates, releasing them from any claims related to the franchised business. The transferee must agree to complete a Franchised Business Renovation, unless one was completed less than five years prior to the transfer. The transferee's operating agreement must state that further transfers are subject to the restrictions in the agreement, and the franchisee may be required to guarantee the transferee's obligations for up to three years. Finally, the transferee must obtain an assignment of the existing lease or execute a new lease for the premises.