Under what circumstances can Buona terminate the franchise agreement without an opportunity to cure related to involuntary transfers?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.7 Involuntary Transfers. Involuntary transfers of this Agreement by Franchisee are not binding on Franchisor and constitute grounds for the termination of this Agreement without the opportunity to cure. Franchisee agrees that using this Agreement as security for a loan or otherwise encumbering this Agreement is prohibited, unless Franchisor specifically consents to such action in writing prior to the proposed transaction. Franchisee shall not grant a sub-franchise under this Agreement nor otherwise seek to license or permit others to use this Agreement or any of the rights derived by Franchisee under it. Any attempt to transfer this Agreement in whole or part, or any material portion or property used by Franchisee in connection with this Agreement, whether or not binding on Franchisor, shall be grounds for the termination of this Agreement without the opportunity to cure, unless the transfer is authorized in writing by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona can terminate the franchise agreement without an opportunity to cure if there are involuntary transfers of the agreement by the franchisee. This means that if the franchisee's ownership of the franchise changes hands due to circumstances like a court order or other involuntary action, Buona has grounds to terminate the agreement immediately.
Specifically, the FDD states that involuntary transfers are not binding on Buona and constitute grounds for termination without the chance to correct the situation. Furthermore, using the franchise agreement as security for a loan or otherwise encumbering it is prohibited unless Buona provides written consent beforehand.
Any attempt to transfer the agreement, in whole or in part, or any material portion of property used in connection with the agreement, whether or not binding on Buona, can lead to termination without an opportunity to cure, unless Buona authorizes the transfer in writing. This protects Buona from having the franchise fall into the hands of someone they have not approved, ensuring that all franchisees meet their standards and qualifications.