Under what conditions is a Buona franchisee prohibited from making statements or agreements with a threatening party regarding trademark issues without the Franchisor's consent?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. delivers to Franchisor prompt written notice of the threat;
- B. grants Franchisor written authorization to take unrestricted control over the defense and settlement of the threat with counsel of its choice;
- C. did not cause or give rise to the threat due to a material failure to comply with Franchisor's previously communicated trademark usage requirements;
- D. cooperates promptly and fully with Franchisor in the defense, mitigation, and/or settlement of the threat; and
- E. does not jeopardize or compromise any right, defense, obligation or liability of Franchisor, by making any statement to, or entering into any agreement with, the threatening party which does not have the advance written consent of Franchisor, unless required by applicable law."
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee is prohibited from making statements or agreements with a threatening party regarding trademark issues without Buona's advance written consent under specific conditions.
Specifically, the franchisee must adhere to several requirements when facing a trademark threat. The franchisee must provide Buona with written notice of the threat promptly. They must also grant Buona written authorization to take unrestricted control over the defense and settlement of the threat, allowing Buona to choose its legal counsel. Additionally, the franchisee must not have caused the threat due to non-compliance with Buona's trademark usage requirements and must fully cooperate with Buona in defending against, mitigating, or settling the threat.
Most importantly, the franchisee must not take any actions that could jeopardize or compromise Buona's rights, defenses, obligations, or liabilities. This includes refraining from making any statements or entering into any agreements with the threatening party without obtaining Buona's advance written consent, unless such action is required by applicable law. This provision ensures that Buona maintains control over its trademarks and legal strategy, protecting the brand's integrity and legal position.
This requirement is fairly standard in franchising, as the franchisor typically owns the trademarks and needs to control their defense. A prospective Buona franchisee should understand these conditions and be prepared to relinquish control over trademark disputes to Buona, ensuring they comply with all requirements to avoid jeopardizing their franchise agreement.