If Buona elects to purchase the franchisee's assets after termination, what is specifically excluded from the valuation of those assets?

According to Buona's 2025 Franchise Disclosure Document, if Buona chooses to purchase a franchisee's assets after the franchise agreement is terminated or expires, the valuation of those assets will specifically exclude any value for goodwill or going concern value. This means that when determining the fair market value of items like improvements, furniture, fixtures, equipment, advertising materials, ingredients, and supplies, the inherent value of the business's reputation and its potential as an ongoing operation will not be considered.

This provision has significant implications for a franchisee. It means that even if the Buona location is highly profitable and well-regarded in the community, the franchisee will not be compensated for that intangible value if Buona decides to buy the assets. The purchase price will be based solely on the tangible assets' fair market value, potentially resulting in a lower payout than the franchisee might expect if goodwill were included.

For a prospective franchisee, it is crucial to understand this aspect of the termination process. While Buona has the right, but not the duty, to purchase these assets, the exclusion of goodwill from the valuation could impact the franchisee's financial return upon exiting the business. Franchisees should factor this into their financial planning and consider seeking legal and financial advice to fully understand the potential implications.