Is a Buona franchisee permitted to commence arbitration with a third party against Buona?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Franchisor and Franchisee agree that arbitration will be conducted on an individual basis only, and not on a joint, collective or class-wide basis, and that an arbitration proceeding between Franchisor and its Affiliates, and Franchisee and its shareholders, officers, directors, members, managers, employees and agents, may not be consolidated or joined with any other arbitration proceeding between Franchisor and any other person or entity. 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. Further, 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 starting arbitration with a third party against Buona. Specifically, the franchisee cannot initiate arbitration with a third party against Buona, nor can they join a third party in any arbitration involving Buona.
Furthermore, the franchisee is prohibited from consolidating or combining any arbitration proceeding involving Buona with another arbitration of any kind. They also cannot attempt to certify a class or participate as a party in a class action against Buona. This limitation ensures that arbitration proceedings remain strictly between Buona and the franchisee, preventing external parties from influencing or complicating the resolution process.
However, there is an exception: if the franchisee is controlled by, controls, or is in active concert with another Buona franchisee, or if there is a guarantor of the franchisee's obligations to Buona, the joinder of those parties in any arbitration between Buona and the franchisee is allowed. Additionally, the joinder of an owner, director, officer, member, manager, partner, or other representative or agent of Buona or the franchisee is permitted. This exception allows for necessary parties with direct involvement or control to be included in the arbitration, ensuring a comprehensive resolution.