If Buona loses possession of the premises, what action must they take to avoid liquidated damages?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) In the event Franchisee loses possession of the Franchised Business for whatever reason prior to the expiration of the term of this Agreement, Franchisee is required to diligently search for a new location and open and operate the Franchised Business as promptly as commercially practicable. In the event Franchisee fails to diligently pursue a new location and open a new Franchised Business, Franchisee shall be liable to Franchisor for Liquidated Damages as provided herein.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a franchisee loses possession of their franchised business location, they must diligently search for a new location and reopen the business as quickly as commercially practicable to avoid liquidated damages.
Specifically, the FDD states that if a franchisee loses possession of the premises for any reason before the franchise agreement expires, they are required to actively seek a new location and resume operations. Failure to do so will result in liability for liquidated damages to Buona.
This clause ensures that Buona franchisees remain operational and maintain the brand's presence in the market. It also protects Buona from potential losses associated with a closed or abandoned franchise location. Franchisees should understand this obligation and be prepared to act swiftly to secure a new location and reopen their business if they lose possession of their original site.