What happens if a Buona franchisee fails to maintain the insurance requirements outlined in the Franchise Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Insurance Requirements | Cost of insurance plus interest at the maximum rate permitted by law, plus a reasonable administrative fee | Upon written notice | If you fail to comply with any of the insurance requirements contained in Article XII of the Franchise Agreement, upon written notice to you by us, we may, without any obligation to do so, procure such insurance and you must pay us, upon demand, the cost of the insurance plus interest at the maximum rate permitted by law, plus a reasonable administrative fee designated by us. |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a franchisee fails to comply with the insurance requirements detailed in Article XII of the Franchise Agreement, Buona has the right, but not the obligation, to procure the necessary insurance on behalf of the franchisee.
Should Buona choose to obtain insurance for the franchisee, the franchisee is responsible for reimbursing Buona for the cost of the insurance. This reimbursement includes the insurance cost itself, interest at the maximum rate permitted by law, and a reasonable administrative fee determined by Buona. The franchisee is required to pay this amount upon demand after receiving written notice from Buona.
This policy ensures that all Buona locations maintain adequate insurance coverage, protecting both the franchisee and the franchisor from potential liabilities. It is crucial for prospective franchisees to understand these requirements and maintain their insurance coverage to avoid additional costs and potential intervention by Buona.