Under what circumstances is Buona not obligated to mediate claims?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, Franchisor shall have no obligation to mediate before commencing litigation in the following circumstances: (i) In the event Franchisor seeks the entry of temporary and permanent injunctions and orders of specific performance in a court of competent jurisdiction to: (a) enforce the provisions of this Agreement relating to Franchisee's use of the Marks and/or your non-disclosure and non-competition obligations under this Agreement; (b) prohibit any act or omission by Franchisee or Franchisee's employees that constitutes a violation of any applicable law, ordinance or regulation, constitutes a danger to the public, or may impair the goodwill associated with the Marks or cause irreparable harm to Franchise, the System, the Marks and/or other franchises of Franchisor agree to waive any claims for damages in the event there is a later determination that an injunction or specific performance order was issued improperly; (ii) in the event Franchisor is filing suit to enforce Franchisee's obligations to pay Franchisor under this Agreement and to seek collection of such fees due and owing to Franchisor; and (iii) in the event Franchisee has abandoned the Franchised Business or has lost its right to possess the premises of the Franchised Business so that the Franchised Business is no longer operating.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona is not obligated to mediate claims under specific circumstances before commencing litigation. These circumstances include instances where Buona seeks temporary or permanent injunctions and orders of specific performance in court to enforce the franchise agreement. This enforcement can relate to the franchisee's use of Buona's marks, non-disclosure, and non-competition obligations. Additionally, Buona need not mediate if the franchisee violates any applicable law, ordinance, or regulation, poses a danger to the public, or impairs the goodwill associated with Buona's marks, system or other franchises.
Buona is also not obligated to mediate if it is filing suit to enforce the franchisee's payment obligations under the franchise agreement, specifically to collect fees owed to Buona. Furthermore, mediation is not required if the franchisee has abandoned the franchised business or lost the right to possess the business premises, resulting in the business no longer operating. In any of these listed scenarios, Buona reserves the right to proceed directly to litigation without first engaging in mediation.
This policy has important implications for prospective franchisees. It means that in certain critical situations, such as protecting its brand or collecting due payments, Buona can quickly take legal action without the delay of mediation. While mediation can be a cost-effective way to resolve disputes, Buona retains the flexibility to bypass this step when it deems necessary to protect its interests, ensure compliance, or address abandonment of the franchise. Franchisees should be aware of these exceptions and understand that legal action could be initiated swiftly in these cases.