Under what circumstances does Buona assume liability or obligation to a franchisee or third party?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
or by Franchisee.
- 25.5 Joint and Several Liability. If two or more persons, corporations, partnerships, or other entities or any combination thereof, sign this Agreement, the liability of each shall be joint and several. All Principals are jointly and severally liable for the performance of Franchisee hereunder.
- 25.6 Successors in Interest. This Agreement is binding upon the heirs, administrators, personal representatives, assigns and successors in interest to the parties to this Agreement.
- 25.7 Franchisor's Reasonable Business Judgment. Whenever Franchisor reserves discretion in a particular area or where Franchisor agrees to exercise its rights reasonably, in good faith or as it deems necessary or advisable, Franchisor will satisfy its obligations whenever Franchisor exercises reasonable business judgment in making its decision or exercising its rights. Franchisor's decisions or actions will be deemed to be the result of reasonable business judgment, even if other reasonable or even
arguably preferable alternatives are available, if Franchisor's decision or action is intended, in whole or significant part, to promote or benefit the System and Franchised Businesses generally, even if the decision or action also promotes Franchisor's financial or other individual interest. Examples of items that will promote or benefit all Franchised Businesses and the System include but are not limited to enhancing the value of the Marks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing or encouraging modernization and improving the competitive position of the System.
- 25.8 Modification of the System.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona's obligations and liabilities to franchisees and third parties are defined within the franchise agreement, particularly concerning the use of reasonable business judgment and delegation of responsibilities. Buona retains discretion in many areas and agrees to exercise its rights reasonably and in good faith. Buona will be deemed to have satisfied its obligations as long as it exercises reasonable business judgment in making decisions or exercising its rights. This is the case even if other alternatives exist, provided Buona's decision is intended to benefit the Buona system generally, even if it also benefits Buona financially.
Buona has the right to delegate any of its obligations under the agreement to third-party designees, including agents or independent contractors. If Buona delegates responsibilities, these third parties are obligated to perform those functions in compliance with the franchise agreement. This means that while Buona can outsource certain duties, it remains responsible for ensuring those duties are performed according to the agreement's terms.
Furthermore, the franchise agreement is binding upon the heirs, administrators, personal representatives, assigns, and successors in interest of both parties. This indicates that the obligations and liabilities outlined in the agreement extend beyond the original parties to their successors, ensuring continuity and enforceability. However, franchisees waive any claims for damages if an injunction or specific performance order is later determined to have been issued improperly. This could have implications for franchisees if they are subject to legal actions by Buona that are later overturned.