Under what circumstances would a Buona franchisee be required to pay Costs and Attorney's Fees?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
as described above.
ITEM 6 OTHER FEES
Franchise Agreement
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnification | Actual costs incurred by us. | As incurred | You have to reimburse us if we are held liable for claims arising from your operation of the development business or incur costs in defending them. |
| Costs and Attorney’s Fees | Actual costs incurred by us. | As incurred | You must reimburse us for costs and attorneys’ fees for enforcement of covenants, for obtaining specific performance of injunctive relief, and if we are successful in an action to enforce the Area Development Agreement. |
| Type of Fee | Amount | Due Date | Remarks |
| Technology Fee | As determined by us based on technology costs for the franchise system. Currently $100 per week | Payable each week. | We will charge this fee via an authorized ACH payment along with royalties. We will give you 60 days prior notice before changing the amount of the fee. |
| Renewal Fee | $7,500 | 30 days prior to the signing of the renewal franchise agreement | |
| Interest on Late Payments | Highest rate of interest permitted by law not to exceed 1.5% per month | As incurred | This interest rate applies to any money you owe us or our affiliate that is more than 7 days overdue and will accrue until the amounts are paid in full. Interest is in addition to service and NSF charges. |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee may be required to cover 'Costs and Attorney's Fees' under specific circumstances. The franchisee must reimburse Buona for costs and attorney's fees incurred for the enforcement of covenants, obtaining specific performance of injunctive relief, and if Buona is successful in an action to enforce the Area Development Agreement. Additionally, the franchisee must pay all costs reasonably incurred in enforcing the Franchise Agreement. These costs are actual costs incurred by Buona and are due as they are incurred.
This means that if Buona has to take legal action to ensure a franchisee is adhering to the terms outlined in either the Franchise Agreement or the Area Development Agreement, the franchisee may be responsible for covering Buona's legal expenses. This could include situations where the franchisee violates a non-compete clause, fails to meet certain operational standards, or breaches any other covenant within the agreements. The franchisee's financial responsibility extends to both the direct costs Buona incurs and the fees for their attorneys.
It is important for a prospective Buona franchisee to understand these potential financial obligations. Legal disputes can be costly, and if Buona prevails in such a dispute, the franchisee will be required to reimburse Buona for these expenses. This underscores the importance of adhering to the terms of the Franchise Agreement and Area Development Agreement to avoid potential legal action and the associated costs. Franchisees should carefully review these agreements with legal counsel to fully understand their obligations and potential liabilities.