What happens if a Buona franchisee relocates, and what agreement will the parties enter into?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) If Franchisee's lease for the premise of the Franchised Business terminates without fault of Franchisee, or expires without any possibility of renewal by Franchisee on commercially reasonable terms as determined by Franchisor, or if in the judgment of Franchisor and Franchisee there is a change in the character of the location of the Franchised Business sufficiently detrimental to its business potential to warrant its relocation, Franchisor shall grant permission for relocation of the Franchised Business to a location approved by Franchisor. Franchisee may not open a relocated Franchised Business without the onsite presence of Franchisor's representative, unless a waiver is requested in writing by Franchisee and approved in writing by Franchisor. Even if the aforementioned request and approval are granted, Franchisee must obtain Franchisor's written authorization, in its sole discretion, of the specific date that the Franchised Business may open. In the event of relocation, the parties will enter into an agreement which will set forth the new location for Franchisee's Franchised Business and a deadline by which Franchisee must open for business at the new location, after which time Franchisee will be obligated to resume paying the royalty and Marketing Fund Contributions whether or not the new location has opened for business. Until such time that the new location is open for business, the amount of the royalty and Marketing Fund Contribution will be based on the Franchisee's average weekly level of Gross Sales during the one-year period prior to closing the first Franchised Business. Any such relocation shall be at Franchisee's sole expense, and shall not be
undertaken without Franchisor's prior written consent. Franchisee shall pay to Franchisor a relocation fee in the amount of fifty percent (50%) of the then-current Initial Franchise Fee to cover Franchisor's services and associated costs in connection with such relocation, including those related to (i) reviewing and approving the new location and the construction drawings for the Franchised Business at its new location and (ii) providing additional on-site training and assistance. Franchisee shall pay fifty percent (50%) of the relocation fee when Franchisor grants the approval to relocate and the balance of the relocation fee upon Franchisor's acceptance of the new location for the Franchised Business.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee may be permitted to relocate their Franchised Business under specific conditions. These conditions include the termination of the franchisee's lease without fault, the expiration of the lease without commercially reasonable renewal options, or a significant change in the location's character that negatively impacts its business potential, as determined by both Buona and the franchisee.
In the event of relocation, Buona requires the parties to enter into an agreement that specifies the new location and a deadline for the franchisee to open for business. After this deadline, the franchisee is obligated to resume royalty and Marketing Fund Contributions, regardless of whether the new location is open. Until the new location opens, the royalty and Marketing Fund Contribution amounts will be based on the franchisee's average weekly Gross Sales during the one-year period before closing the original location.
The relocation is at the franchisee's sole expense and requires Buona's prior written consent. Additionally, Buona charges a relocation fee equal to fifty percent of the then-current Initial Franchise Fee. This fee covers Buona's services and associated costs, including reviewing and approving the new location, assessing construction drawings, and providing additional on-site training and assistance. Fifty percent of the relocation fee is due when Buona approves the relocation, and the remaining balance is due upon Buona's acceptance of the new location.