Can a Buona franchisee participate as a party in a class action against Buona?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
neither Franchisor nor Franchisee shall attempt to consolidate or otherwise combine in any manner, an arbitration proceeding involving Franchisor and Franchisee with another arbitration of any kind, nor shall Franchisor or Franchisee attempt to certify a class or participate as a party in a class action against the other.
- (b) The foregoing notwithstanding, in the event Franchisee controls, is controlled by, or is in active concert with another franchisee of Franchisor, or there is a guarantor of some or all of Franchisee's obligations to Franchisor, then the joinder of those parties to any arbitration between Franchisor and Franchisee shall be permitted, and in all events, the joinder of an owner, director, officer, member, manager, partner or other representative or agent of Franchisor or Franchisee shall be permitted.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee is restricted from participating in a class action against Buona. Specifically, the FDD states that neither Buona nor the franchisee can attempt to certify a class or participate as a party in a class action against the other. This clause is designed to ensure that disputes are handled individually through arbitration rather than through class action lawsuits.
This restriction is in place to prevent large, complex, and potentially costly class action lawsuits. Instead, Buona requires disputes to be resolved through arbitration, which is generally a faster and less expensive process. However, there are exceptions. If a franchisee is controlled by, controls, or is in active concert with another Buona franchisee, the joinder of those parties to any arbitration between Buona and the franchisee is permitted. Additionally, the joinder of an owner, director, officer, member, manager, partner, or other representative or agent of Buona or the franchisee is allowed.
This clause has significant implications for prospective franchisees. It means that a franchisee cannot join forces with other franchisees to sue Buona as a group. Instead, each franchisee must pursue their claims individually through arbitration. While arbitration can be more efficient, it may also limit the franchisee's ability to share resources and present a unified front against Buona. Franchisees should consider this limitation carefully and understand the potential impact on their legal rights and options.
It is important for potential Buona franchisees to seek legal counsel to fully understand the implications of this clause and how it may affect their rights and remedies in the event of a dispute with Buona. Understanding these limitations is crucial for making an informed decision about investing in a Buona franchise.