Under what circumstances related to payments owed to Buona can the franchise agreement be terminated?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
16.5 Cross-Default and Cross-Termination Provisions.
(a) A default by Franchisee under this Agreement will be deemed a default of all agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates. A default by Franchisee under any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates will be deemed a default under this Agreement. A default by the guarantors of this Agreement or any other agreement of guaranty will be deemed a default of this Agreement. For purposes of clarity, any agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates include, without limitation, any other Franchise Agreement or Area Developer Agreement.
- (b) If this Agreement is terminated as a result of a default by Franchisee (or any affiliate of Franchisee), Franchisor or its Affiliates may, at their option, elect to terminate any or all other agreements between Franchisee (or an affiliate of Franchisee) and Franchisor or its Affiliates.
If any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates is terminated as a result of a default by Franchisee (or any affiliate of Franchisee), Franchisor may, at its option, elect to terminate this Agreement.
It is agreed that an incurable or uncured default under this Agreement or any other agreement between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates will be grounds for termination of this Agreement and/or all agreements between Franchisee (or any affiliate of Franchisee) and Franchisor or its Affiliates without additional notice or opportunity to cure.
- 16.6 Arrearage Agreement.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchise agreement can be terminated if a franchisee defaults on any agreement with Buona or its affiliates. This includes any monetary obligations.
Specifically, if a franchisee fails to meet their monetary obligations to Buona and its affiliates, or to designated suppliers, or fails to satisfy any indebtedness guaranteed by Buona, this can lead to termination. Furthermore, if the franchisee doesn't pay the $1,000 per day fee associated with failing to comply with an audit, this can also lead to termination of the franchise agreement.
Additionally, if a franchisee has any other agreements with Buona or its affiliates, a default in any of those agreements can trigger a default and potential termination of the franchise agreement. This "cross-default" provision means that financial issues in one area of the Buona franchise relationship can have serious repercussions for the entire franchise operation. It is important to note that defaults by guarantors of any agreement are also considered defaults of the franchise agreement.