Under what circumstances is Buona not obligated to mediate before commencing litigation?
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 Buona franchises. 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 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona is not required to mediate before starting a lawsuit in specific situations. These include instances where Buona seeks a temporary or permanent injunction or specific performance order from a court to enforce the franchisee's obligations regarding the use of Buona's trademarks, non-disclosure agreements, or non-competition agreements. This also applies if Buona aims to prevent actions by the franchisee or their employees that violate laws, pose a public danger, or harm the goodwill associated with the Buona brand.
Additionally, Buona is not obligated to mediate if it is filing a lawsuit to enforce the franchisee's payment obligations under the franchise agreement, seeking to collect fees owed to Buona. Another exception is when the franchisee has abandoned the franchised business or lost the right to possess the business premises, resulting in the business no longer operating. In these specific cases, Buona reserves the right to proceed directly to litigation without first engaging in mediation efforts.
This means that a Buona franchisee could face immediate legal action from the franchisor without prior mediation in situations involving trademark infringement, breaches of confidentiality or non-compete clauses, failure to pay required fees, or abandonment of the business. Prospective franchisees should understand these conditions, as they waive any claims for damages if an injunction or specific performance order is later found to be improperly issued. This differs from the standard practice in many franchise systems, where mediation is often a prerequisite to litigation to resolve disputes amicably and potentially avoid costly legal battles.