What is the required use of the premises during the term of the Franchise Agreement for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
6.2 Site Selection and Approval. If the location is not designated on Exhibit A at the time this Agreement is executed, it is Franchisee's sole responsibility to undertake site selection activities and otherwise secure the premises for the Franchised Business. Prior to entering into a lease for a site, Franchisee must submit to Franchisor a site evaluation form for the proposed site, together with a letter of intent, proposed lease, or other evidence satisfactory to Franchisor which confirms Franchisee's favorable prospects for obtaining the proposed site. Franchisor in its discretion shall determine what factors it will consider in approving or disapproving a site, including but not limited to characteristics of the location and premises and financial terms of the proposed purchase agreement or lease. In the event that Franchisee proposes to lease the proposed site from an affiliated entity, or an entity that includes any member or shareholder of the Franchisee business entity as a member or shareholder, Franchisor may be required to submit a proforma and/or draft lease to Franchisor before a determination is made by Franchisor regarding approval of the site. Franchisee or the affiliated entity shall not secure financing or purchase the property until the site has been approved by Franchisor. Franchisor will provide Franchisee written notice of approval or disapproval of the proposed site within thirty (30) days after receiving Franchisee's written proposal and all required documents. Franchisee must obtain Franchisee's written approval
of a proposed site before entering into a lease. Franchisee must have a proposed site approved by Franchisor within nine (9) months of the date of the execution of this Agreement. Franchisor has the unilateral right (but not the obligation) to terminate the Agreement upon delivery of notice to Franchisee if Franchisee has not obtained Franchisor's written approval of a site for the Franchised Business within time frames described above. While Franchisor may use its experience in providing any assistance to Franchisee regarding site selection and in approving a site, nothing contained herein shall be interpreted as a guarantee of success for said location.
- 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.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchisee is responsible for securing the premises for the Franchised Business. Prior to signing a lease, the franchisee must submit a site evaluation form, a letter of intent, a proposed lease, or other evidence confirming favorable prospects for obtaining the site to Buona for approval. Buona will determine the factors for approval or disapproval, including the location, premises, and financial terms. The franchisee cannot secure financing or purchase the property until Buona approves the site. Buona will provide written notice of approval or disapproval within 30 days of receiving the franchisee's written proposal and all required documents. The franchisee must obtain written approval of a proposed site before entering into a lease and must have a proposed site approved by Buona within nine months of the execution of the Franchise Agreement. Buona has the right to terminate the agreement if the franchisee does not obtain written approval of a site within the specified time frame. Any letter of intent or proposed lease for the premises must be approved by Buona before it is executed by the franchisee.
Buona does not guarantee the success of the location, even with their assistance in site selection and approval. The franchisee bears the responsibility of site selection and securing the premises. This process ensures that the location meets Buona's standards and has a reasonable chance of success, but the ultimate responsibility lies with the franchisee.
These stipulations are typical in franchise agreements to protect brand consistency and ensure that franchise locations meet certain standards for visibility, accessibility, and market potential. Franchisees should carefully review the site selection criteria and approval process to understand their obligations and the factors that Buona will consider. Franchisees should also factor in the time required for site approval when planning their launch timeline, as failure to secure approval within nine months could lead to termination of the agreement.