What sections of the Buona Franchise Agreement cover site selection and acquisition/lease obligations?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
s as Franchisor may require from time to time in the Manual or otherwise in writing; and
- (g) Franchisee shall maintain transfer restrictions on its records, of any securities with voting rights, subject to the restrictions of this Agreement, and each certificate of Franchisee representing ownership or equity interests in the Entity, shall have conspicuously endorsed upon it the following legend:
The transfer of this [stock/membership interest/ownership interest] is subject to the terms and conditions of a Buona Franchise Agreement with Buona dated . Reference is made to the provisions of said Franchise Agreement and to the governing documents of [name of Franchisee Entity].
- 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 for a lease for the premises of the Buona Business and any proposed lease for the premises of the Buona 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.
- 6.4 Premises Development**.** Prior to obtaining possession of the site for the Buona Business, Franchisee shall secure all financing required to fully develop the Buona Business. Promptly after obtaining possession of the site for the Franchised Business, Franchisee will: (i) cause to be prepared and submit for
approval by Franchisor a site plan.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 34–37)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, several sections of the Franchise Agreement outline the franchisee's responsibilities for site selection and lease obligations. Section 6.2, titled "Site Selection and Approval," details the franchisee's responsibility to find a location for the Franchised Business. It requires the franchisee to submit a site evaluation form, a letter of intent, a proposed lease, or other evidence to Buona for approval before entering into a lease. Buona has the discretion to determine the factors for approving or disapproving a site. 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. The franchisee must obtain written approval before entering into a lease and must have a proposed site approved within nine months of the Franchise Agreement's execution.
Section 6.3, titled "Lease of Premises," stipulates that any letter of intent or proposed lease must be approved by Buona before the franchisee executes it. Buona may require commercially reasonable terms based on current market conditions and may require specific terms and provisions in the letter of intent and lease. Approval is also conditioned on the landlord's execution of the Addendum to Lease and Collateral Assignment (Exhibit B) or inclusion of similar terms approved by Buona. These requirements apply whether the lessor is a third party or an affiliate of the franchisee. The franchisee must provide Buona with a fully signed copy of the complete lease once executed.
In Item 11, under Pre-Opening Assistance, Buona states that while they provide location research and assistance in selecting a site as they deem advisable, it is ultimately the franchisee's responsibility to decide on the location, subject to Buona's approval, as stated in Franchise Agreement, Section 1.1 and Exhibit A. Buona must also approve the letter of intent for the lease and the lease itself before the franchisee executes it, as stated in Franchise Agreement, Section 6.3.