Does Buona permit arbitration proceedings to be conducted on a joint, collective, or class-wide basis?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and Franchisee agree that arbitration will be conducted on an individual basis only, and not on a joint, collective or class-wide basis, and that an arbitration proceeding between Franchisor and its Affiliates, and Franchisee and its shareholders, officers, directors, members, managers, employees and agents, may not be consolidated or joined with any other arbitration proceeding between Franchisor and any other person or entity.
Neither party shall commence any arbitration with a third party against the other, or join with any third party in any arbitration involving Franchisor and Franchisee.
Further, neither Franchisor nor Franchisee shall attempt to consolidate or otherwise combine in any manner, an arbitration proceeding involving Franchisor and Franchisee with another arbitration of any kind, nor shall Franchisor or Franchisee attempt to certify a class or participate as a party in a class action against the other.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, arbitration proceedings are limited to individual actions. Buona's franchise agreement specifies that arbitration will be conducted on an individual basis only, explicitly prohibiting joint, collective, or class-wide arbitration. This means a franchisee cannot consolidate their arbitration proceeding with any other arbitration proceeding involving Buona or attempt to certify a class or participate in a class action against Buona.
This limitation on proceedings means that each franchisee must pursue any claims against Buona individually, which can be more costly and time-consuming than a class action. It also prevents franchisees from combining resources and sharing legal costs. However, there is an exception: if the franchisee is controlled by, controls, or is in active concert with another Buona developer, or if there is a guarantor of the franchisee's obligations to Buona, the joinder of those parties to any arbitration between Buona and the franchisee is permitted. The joinder of an owner, director, officer, member, manager, partner or other representative or agent of Buona or the franchisee is also permitted.
This clause is generally favorable to the franchisor, Buona, as it avoids the risk of large class-action lawsuits. Franchisees should be aware of this limitation and consider its implications before entering into a franchise agreement with Buona. It is common in the franchise industry for franchisors to include such limitations to manage legal risks and costs.