Does Buona require that the letter of intent or lease for the premises contain commercially reasonable terms based on current market conditions?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.3 Lease of Premises.
Any letter of intent lease for the premises of a Franchised Business and any proposed lease for the premises of the Franchised Business must be approved by Franchisor before it is executed by Franchisee.
Franchisor may, in its discretion, require that the letter of intent and the lease contain commercially reasonable terms based on current market conditions and that certain terms and provisions be included in the letter of intent and the lease.
Franchisor's approval of the lease shall also be conditioned upon the landlord's execution of the Addendum to Lease and Collateral Assignment attached hereto as Exhibit B, or inclusion in the lease of the same or similar terms as approved by Franchisor. .
The requirements set forth herein apply whether the lessor is an unrelated third party or is an affiliate of Franchisee.
Once executed, Franchisee will provide Franchisor with a fully signed copy of the complete lease for the premises of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, any letter of intent or lease for a Franchised Business's premises, as well as any proposed lease, requires approval from Buona before the franchisee executes it. Buona may mandate that the letter of intent and the lease incorporate commercially reasonable terms that reflect current market conditions. Additionally, Buona may require specific terms and provisions to be included in these documents.
Buona's approval of the lease is contingent upon the landlord's execution of an Addendum to Lease and Collateral Assignment, as detailed in Exhibit B of the FDD, or the inclusion of similar terms approved by Buona within the lease itself. These requirements apply regardless of whether the lessor is an unrelated third party or an affiliate of the franchisee.
After the lease is executed, the franchisee must provide Buona with a fully signed copy of the complete lease for the business premises. This ensures Buona maintains oversight and control over the real estate agreements, protecting their brand and operational standards.