Under what conditions can The Buona Companies L.L.C. terminate the License Agreement with Buona?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
We have been granted the right to license the Marks and System to our franchisees by a License Agreement between us and our affiliate The Buona Companies L.L.C. dated May 13, 2021. Our License Agreement with The Buona Companies L.L.C. does not materially limit our rights to use or to license our franchisees to use the Marks and System. The agreement is for an initial term of 20 years with successive 5-year automatic renewal options. The agreement includes quality control provisions for the protection of the licensor's trademark rights. The agreement may be terminated by The Buona Companies L.L.C. only for good cause due to a breach by us without cure, change in ownership of us of more than 20%, or our filing bankruptcy, becoming insolvent or being subject to the appointment of a receiver or trustee.
Source: Item 13 — TRADEMARKS (FDD pages 48–50)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the License Agreement between Buona and The Buona Companies L.L.C., which grants Buona the right to license the Marks and System to its franchisees, can be terminated by The Buona Companies L.L.C. under specific circumstances.
The Buona Companies L.L.C. can terminate the agreement only for "good cause" if Buona breaches the agreement and fails to correct the breach. Termination can also occur if there is a change in ownership of Buona of more than 20%. Finally, The Buona Companies L.L.C. can terminate the agreement if Buona files for bankruptcy, becomes insolvent, or is subject to the appointment of a receiver or trustee.
This agreement between Buona and The Buona Companies L.L.C. has an initial term of 20 years with successive 5-year automatic renewal options. This arrangement ensures that Buona franchisees can use the Marks and System, provided Buona remains in good standing and adheres to the terms of the License Agreement.