If Buona permits a franchisee to continue operating after the initial term but before a renewal agreement is executed, on what basis does the temporary continuation occur?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.4 Continued Operation Following Expiration. Franchisee has no right to continue to operate the Franchised Business after the expiration of the initial term of this Agreement unless Franchisee is granted a renewal Franchise Agreement in accordance with this Section 2. If Franchisor permits Franchisee to continue to operate the Franchised Business after the expiration of the initial term of this Agreement but before the execution of a renewal Franchise Agreement as required by Section 2.2, then the temporary continuation of the Franchised Business will be on a month-to-month basis, and will be terminable at Franchisor's option by giving Franchisee written notice of termination at least thirty (30) days before the termination is effective. If the laws of the jurisdiction in which the Franchisee or the Franchised Business are located require a longer notice period, the thirty-day period will be deemed modified to be the shortest notice period required by the laws of such jurisdiction.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee does not have the right to continue operating after the initial franchise term unless a renewal agreement is granted. However, if Buona allows a franchisee to continue operations while waiting for the renewal agreement, the business operates on a month-to-month basis.
This temporary arrangement can be terminated by Buona with a written notice of at least thirty days. The FDD also notes that if the jurisdiction where the franchise is located requires a longer notice period, then that longer period will apply.
For a prospective franchisee, this means that any continued operation without a fully executed renewal agreement is at Buona's discretion and can be terminated relatively quickly. This arrangement provides little security for the franchisee, as Buona retains the right to end the agreement with limited notice, potentially impacting the franchisee's business and investment.