After termination or expiration of the Buona franchise agreement, how many days does Buona have to exercise its right to purchase the franchisee's assets?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2 Franchisor's Right to Purchase.
Franchisor shall have the right (but not the duty) to exercise by notice of intent to do so within thirty (30) days after termination or expiration of this Agreement, to purchase any and all improvements, furniture, fixtures, equipment, advertising and promotional materials, ingredients, products, materials, supplies, paper goods and any items bearing Franchisor's Marks at then-current fair market value, but specifically excluding any value for goodwill or going concern value.
If the parties cannot agree on a fair market value within a reasonable time, an independent appraiser shall be designated by Franchisor, and his/her determination of fair market value shall be binding.
If Franchisor elects to exercise any option to purchase provided in this Section, it shall have the right to set-off all amounts due from Franchisee under this Agreement and the cost of the appraisal, if any, against any payment therefor.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona has the right to purchase a franchisee's assets within thirty (30) days after the termination or expiration of the franchise agreement. This right, however, is not a duty, meaning Buona is not obligated to make such a purchase.
If Buona chooses to exercise this right, it must notify the franchisee of its intent within the 30-day window. The purchase would include items like improvements, furniture, fixtures, equipment, advertising materials, ingredients, products, materials, supplies, paper goods, and any items bearing Buona's marks. The purchase price will be based on the then-current fair market value of the assets, specifically excluding any value for goodwill or the business's going concern value.
In the event that Buona and the franchisee cannot agree on a fair market value for the assets, Buona will designate an independent appraiser whose determination of the fair market value will be binding on both parties. Buona also has the right to offset any amounts owed by the franchisee under the agreement, as well as the cost of the appraisal, against the purchase price. This could significantly reduce the cash a franchisee receives for their assets upon exiting the Buona system.