What is the initial term length of the License Agreement between Buona and The Buona Companies L.L.C.?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
We have been granted the right to license the Marks and System to our franchisees by a License Agreement between us and our affiliate The Buona Companies L.L.C. dated May 13, 2021. Our License Agreement with The Buona Companies L.L.C. does not materially limit our rights to use or to license our franchisees to use the Marks and System. The agreement is for an initial term of 20 years with successive 5-year automatic renewal
options. The agreement includes quality control provisions for the protection of the licensor's trademark rights. The agreement may be terminated by The Buona Companies L.L.C. only for good cause due to a breach by us without cure, change in ownership of us of more than 20%, or our filing bankruptcy, becoming insolvent or being subject to the appointment of a receiver or trustee.
Source: Item 13 — TRADEMARKS (FDD pages 48–50)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the License Agreement between Buona and The Buona Companies L.L.C., dated May 13, 2021, has an initial term of 20 years. Following the initial term, the agreement includes successive 5-year automatic renewal options. This agreement allows Buona to license its trademarks and system to its franchisees.
This license agreement is crucial for Buona franchisees because it grants Buona the right to use the trademarks and system, which are essential for operating a Buona franchise. The 20-year initial term provides a substantial period of stability and assurance for franchisees, allowing them to build their business under the established brand. The automatic renewal options further extend this security, assuming the terms of the agreement are met.
However, the agreement can be terminated by The Buona Companies L.L.C. under specific conditions, including a breach by Buona without cure, a change in ownership of more than 20%, or Buona's filing for bankruptcy, becoming insolvent, or being subject to the appointment of a receiver or trustee. These termination clauses highlight the importance of maintaining operational and financial stability to avoid potential disruptions to the franchise agreement. The agreement also includes quality control provisions, which are typical in franchise agreements to protect the licensor's trademark rights and ensure brand consistency across all franchise locations.