If transferring a Buona franchise, must all accounts payable and monetary obligations to Buona and its affiliates be paid in full?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall not unreasonably withhold its written approval of a transfer, provided Franchisee and the assignee or transferee have met all of the following conditions as determined by Franchisor in its sole discretion:
- (a) Franchisee shall not be in default under this Agreement or any agreement with Franchisor and its Affiliates at the time Franchisee requests the right to transfer the franchise or at the time the Franchised Business is to actually be transferred.
All accounts payable and other monetary obligations to Franchisor and its Affiliates shall be paid in full;
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee must pay all outstanding accounts payable and monetary obligations to Buona and its affiliates before transferring their franchise. This requirement is one of the conditions that Buona assesses when considering whether to approve a franchise transfer.
This stipulation ensures that Buona maintains financial integrity and receives all due payments before a transfer occurs. For a prospective franchisee looking to eventually sell their Buona franchise, it highlights the importance of maintaining good financial standing with the franchisor throughout the term of the agreement. Failure to meet these financial obligations could impede the ability to transfer the franchise to a new owner.
In practical terms, a franchisee planning to transfer their Buona business needs to ensure all invoices, royalties, and any other financial obligations to Buona and its affiliates are settled. This includes verifying that all payments have been properly credited and resolving any discrepancies well in advance of the proposed transfer date. This requirement is typical in franchising, as franchisors want to avoid transferring a business with outstanding debts that could negatively impact the brand.