Under what circumstances would a Buona franchisee be required to pay indemnification fees?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Conference Registration Fee | Not yet determined since we have not held a conference. | As incurred. | If we hold conferences, your owner(s) may be required to attend any conference for which we determine attendance is mandatory. We may charge you a fee to attend the conference. Any costs or expenses associated with your owner(s)'s attendance of such conferences will be borne solely by you. |
| Indemnification | Actual costs incurred by us. | As incurred | You must pay for us for any losses and expenses incurred in connection with any action, suit, proceeding, claim, demand, investigation, or formal or informal inquiry (regardless of whether the same is reduced to judgment) or any settlement thereof, which arises out of, or is based upon any of the items listed in the section of the Franchise Agreement labeled "Indemnification." |
Source: Item 6 — OTHER FEES (FDD pages 16–23)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees may be required to pay indemnification fees under specific circumstances. Buona states that franchisees must reimburse them for any losses and expenses incurred due to any action, suit, proceeding, claim, demand, investigation, or formal or informal inquiry, regardless of whether it results in a judgment. This also applies to any settlement that arises out of or is based upon any of the items listed in the section of the Franchise Agreement labeled "Indemnification."
In simpler terms, if someone sues Buona because of something the franchisee did or didn't do while running their business, the franchisee might have to cover Buona's legal costs and any money Buona has to pay out. These costs are based on actual costs incurred by Buona and are due as they are incurred.
This is a fairly standard clause in franchise agreements. It's important for a prospective Buona franchisee to carefully review the "Indemnification" section of the Franchise Agreement to fully understand the scope of their responsibilities and potential liabilities. Understanding what actions could trigger this indemnification clause is crucial for managing risk as a franchisee.