If the Buona premises are damaged or destroyed, how long does the franchisee have to apply for approval to relocate or reconstruct?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
However, if, through no fault of Franchisee, the premises are damaged or destroyed by an event not within the control of Franchisee such that repairs or reconstruction cannot be completed within six (6) months thereafter, then Franchisee shall have thirty (30) days after such event in which to apply for Franchisor's approval to relocate the Franchised Business and/or reconstruct the premises, which approval shall not be unreasonably withheld, provided Franchisee is not then in default under this Agreement or any other agreement between Franchisee and Franchisor or any of its Affiliates, but may be conditioned upon the payment of an agreed minimum royalty to Franchisor during the period in which the Franchised Business is not in operation;
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if the premises are damaged or destroyed through no fault of the franchisee and repairs or reconstruction cannot be completed within six months, the franchisee has 30 days after the event to apply for Buona's approval to relocate or reconstruct the premises. This approval will not be unreasonably withheld, provided the franchisee is not in default under the Franchise Agreement or any other agreement with Buona or its affiliates.
However, Buona may condition its approval upon the payment of an agreed minimum royalty during the period in which the franchised business is not in operation. This means that even if the store is closed due to unforeseen circumstances, the franchisee may still be obligated to pay royalties to Buona, which could impact their financial recovery after the damage.
This clause protects the franchisee by giving them a reasonable timeframe to seek approval for relocation or reconstruction, but it also protects Buona's interests by allowing them to collect royalties even when the business is temporarily closed. Franchisees should carefully consider the potential financial implications of this clause and discuss it with Buona during their due diligence process.