Under what conditions can Buona require a franchisee to re-engage a designated accounting service after the initial 12 months?

According to Buona's 2025 Franchise Disclosure Document, during the first 12 months of operation, a franchisee is required to use an accounting service that Buona designates for preparing financial statements and financial reporting. After this initial period, Buona can mandate that the franchisee re-engage Buona's designated accounting service if the franchisee is not in full compliance with the accounting requirements outlined in Section VI of the franchise agreement. Buona will provide written notice to the franchisee if this re-engagement is required.

This provision ensures that Buona franchisees maintain accurate and consistent financial reporting, which is crucial for the integrity and uniformity of the Buona franchise system. By requiring franchisees to use a designated accounting service, especially when they are not meeting the required standards, Buona aims to protect the brand's reputation and ensure reliable financial data across all franchise locations.

For a prospective Buona franchisee, this means that while they have the flexibility to choose their own accounting service after the first year, they must adhere to Buona's accounting standards. Failure to comply with these standards can result in Buona requiring them to revert to the designated accounting service. It is important for franchisees to understand and meet these accounting requirements to avoid any disruption to their business operations and maintain a good standing with the franchisor.