Under what circumstances is a Buona franchisee required to pay indemnification costs?

According to Buona's 2025 Franchise Disclosure Document, franchisees may be required to cover indemnification costs under specific circumstances. Buona franchisees must pay for any losses and expenses incurred by Buona in connection with any action, suit, proceeding, claim, demand, investigation, or formal or informal inquiry, regardless of whether it goes to judgment, or any settlement thereof. This applies if the issue arises out of, or is based upon any of the items listed in the section of the Franchise Agreement labeled "Indemnification."

Additionally, Buona franchisees must reimburse Buona for actual costs incurred if Buona is held liable for claims arising from the franchisee's operation of the development business or if Buona incurs costs in defending against such claims. These costs are due as they are incurred.

This means that if a customer or employee sues Buona due to something that happened at the franchisee's location, and Buona incurs legal or settlement costs, the franchisee is responsible for reimbursing Buona. This is a fairly standard clause in franchise agreements, designed to protect the franchisor from liabilities caused by the actions of individual franchisees. Prospective franchisees should carefully review the "Indemnification" section of the Franchise Agreement to fully understand the scope of their responsibilities.