If the location is not designated on Exhibit A, whose responsibility is it to undertake site selection activities for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
6.2 Site Selection and Approval. If the location is not designated on Exhibit A at the time this Agreement is executed, it is Franchisee's sole responsibility to undertake site selection activities and otherwise secure the premises for the Franchised Business. Prior to entering into a lease for a site, Franchisee must submit to Franchisor a site evaluation form for the proposed site, together with a letter of intent, proposed lease, or other evidence satisfactory to Franchisor which confirms Franchisee's favorable prospects for obtaining the proposed site. Franchisor in its discretion shall determine what factors it will consider in approving or disapproving a site, including but not limited to characteristics of the location and premises and financial terms of the proposed purchase agreement or lease. In the event that Franchisee proposes to lease the proposed site from an affiliated entity, or an entity that includes any member or shareholder of the Franchisee business entity as a member or shareholder, Franchisor may be required to submit a proforma and/or draft lease to Franchisor before a determination is made by Franchisor regarding approval of the site. Franchisee or the affiliated entity shall not secure financing or purchase the property until the site has been approved by Franchisor. Franchisor will provide Franchisee written notice of approval or disapproval of the proposed site within thirty (30) days after receiving Franchisee's written proposal and all required documents. Franchisee must obtain Franchisee's written approval
of a proposed site before entering into a lease. Franchisee must have a proposed site approved by Franchisor within nine (9) months of the date of the execution of this Agreement. Franchisor has the unilateral right (but not the obligation) to terminate the Agreement upon delivery of notice to Franchisee if Franchisee has not obtained Franchisor's written approval of a site for the Franchised Business within time frames described above. While Franchisor may use its experience in providing any assistance to Franchisee regarding site selection and in approving a site, nothing contained herein shall be interpreted as a guarantee of success for said location.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if the location for the franchise is not already specified on Exhibit A of the franchise agreement when the agreement is signed, the responsibility for finding and securing a suitable site falls entirely on the franchisee. This means the franchisee must take the lead in identifying potential locations that meet Buona's criteria.
Before committing to a location, the franchisee must submit a site evaluation form to Buona, along with supporting documents like a letter of intent or proposed lease, to demonstrate the viability of the site. Buona has the discretion to approve or disapprove a site based on factors such as location characteristics, premises, and financial terms of the lease or purchase agreement. If the franchisee intends to lease the site from an affiliated entity, Buona may require additional financial information and lease drafts before making a decision.
The franchisee cannot finalize financing or purchase the property until Buona provides written approval of the site. Buona is obligated to provide a written decision within 30 days of receiving the franchisee's proposal and all necessary documents. The franchisee must secure Buona's approval within nine months of signing the franchise agreement. Buona retains the right to terminate the agreement if the franchisee fails to obtain site approval within this timeframe. While Buona may offer assistance and share its expertise during the site selection process, the FDD clarifies that this assistance does not guarantee the location's success.
In summary, while Buona offers guidance, the onus is on the franchisee to find and secure an acceptable location. The franchisee bears the risk of investing time and resources in site selection, with no guarantee of approval or success. This arrangement is typical in the franchise industry, where franchisees often have local market knowledge, but franchisors maintain control over brand standards and site suitability.