Is a Buona franchisee required to indemnify Buona for losses resulting from failure to comply with Payment Card Industry Data Security Standards or data privacy laws?

According to Buona's 2025 Franchise Disclosure Document, a franchisee is required to indemnify Buona for losses if they fail to comply with Payment Card Industry Data Security Standards or data privacy laws. This means the franchisee is responsible for defending Buona, at the franchisee's own cost, against any claims, losses, costs, expenses (including attorney's fees), taxes, damages, and liabilities that arise directly or indirectly from their non-compliance.

This requirement places a significant financial burden on the franchisee to ensure they adhere to all relevant data security and privacy regulations. Failure to do so could result in substantial costs beyond potential fines and penalties, including legal fees and damages that Buona might incur.

Franchisees must ensure their point-of-sale systems and payment processing systems are compliant with current Payment Card Industry Data Security standards, all applicable data privacy laws, and any procedures required by the Buona manual to prevent credit card fraud. This includes staying updated on the latest security protocols and implementing necessary measures to protect customer data.

This type of indemnification clause is relatively common in franchise agreements, as franchisors seek to protect themselves from liabilities arising from the actions or omissions of their franchisees. However, the breadth and potential cost of such indemnification underscore the importance of diligent compliance with all applicable regulations.