If a Buona franchisee fails to comply with insurance requirements, how much is the non-compliance fee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
as required under Article IV.
- d. Failure to Properly Use Trade Secret Products. Franchisee shall pay Franchisor a fee of One Thousand Dollars ($1,000) per day for each and every day, beginning with the first day that Franchisee fails to properly use Trade Secret Products as required in Section 10.3.
- e. Failure to Comply with Specific Operating Standards. Franchisee shall pay Franchisor a fee of One Thousand Dollars ($1,000) for each and every day, beginning with the first day up through and including the day the default is cured, that Franchisee's Franchised Business fails to comply with the following specific Operating Standards, as set forth in this Agreement or in the Manuals, and of which the Franchisor has given Franchisee at least fifteen (15) days' notice: (i) all employees wearing required uniforms as required in Section 10.9; (ii) using designated or approved suppliers as required in Section 10.3; (iii) complying with the insurance require
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee will be subject to a monetary non-compliance fee for failing to comply with specific operating standards. This includes failing to comply with the insurance requirements as outlined in Section 12 of the agreement.
The non-compliance fee for failing to meet the insurance requirements is $1,000 per day. This fee starts from the first day of non-compliance and continues each day until the franchisee corrects the issue. Buona will provide at least fifteen (15) days' notice before imposing this fee.
It is important to note that this fee is in addition to any other remedies available to Buona under the Franchise Agreement or applicable law. This means that Buona could pursue other legal or contractual options in addition to, or instead of, imposing the daily non-compliance fee.
This type of daily non-compliance fee is not uncommon in franchising as a way to encourage franchisees to adhere to brand standards and operational requirements, protecting the brand's reputation and ensuring consistency across all locations.