Under what conditions can Buona withhold approval for relocation after premises damage?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
However, if, through no fault of Franchisee, the premises are damaged or destroyed by an event not within the control of Franchisee such that repairs or reconstruction cannot be completed within six (6) months thereafter, then Franchisee shall have thirty (30) days after such event in which to apply for Franchisor's approval to relocate the Franchised Business and/or reconstruct the premises, which approval shall not be unreasonably withheld, provided Franchisee is not then in default under this Agreement or any other agreement between Franchisee and Franchisor or any of its Affiliates, but may be conditioned upon the payment of an agreed minimum royalty to Franchisor during the period in which the Franchised Business is not in operation;
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a Buona restaurant's premises are damaged or destroyed through no fault of the franchisee, and repairs or reconstruction cannot be completed within six months, the franchisee has 30 days to apply for approval to relocate or reconstruct. Buona's approval for relocation or reconstruction will not be unreasonably withheld, provided the franchisee is not in default under the Franchise Agreement or any other agreement with Buona or its affiliates.
However, Buona may condition its approval upon the payment of an agreed minimum royalty during the period the restaurant is not in operation. This means that even if the damage wasn't the franchisee's fault, Buona can still require royalty payments while the restaurant is being repaired or relocated.
This condition protects Buona's ongoing revenue stream, but it places a financial burden on the franchisee during a difficult time. A prospective franchisee should clarify with Buona what the 'agreed minimum royalty' would be in such a scenario to fully understand the potential financial implications.