Under what conditions can Buona withhold written approval of a franchise transfer?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall not unreasonably withhold its written approval of a transfer, provided Franchisee and the assignee or transferee have met all of the following conditions as determined by Franchisor in its sole discretion:
- (a) Franchisee shall not be in default under this Agreement or any agreement with Franchisor and its Affiliates at the time Franchisee requests the right to transfer the franchise or at the time the Franchised Business is to actually be transferred.
All accounts payable and other monetary obligations to Franchisor and its Affiliates shall be paid in full;
(b) Franchisee shall have agreed to remain obligated under the covenants contained in Article XIV hereof as if this Agreement had been terminated on the date of the transfer;
(c) The transferee must be of good moral character and reputation, in the reasonable judgment of Franchisor;
(d) Franchisor shall have determined, to its satisfaction, that the transferee's qualifications meet Franchisor's then-current criteria for new franchisees;
(e) The terms and conditions of the proposed transfer, including all financial terms of the proposed transfer, shall be provided in writing to Franchisor at least fifteen (15) business days prior to the proposed effective date of the transfer, and shall be approved in writing by Franchisor;
(f) The transferee shall execute, at Franchisor's option, (i) written assignment, in form satisfactory to Franchisor, pursuant to which the transferee shall assume all of the obligations of Franchisee under this Agreement and any other agreement relating to the Franchised Business to be transferred; or (ii) the then-current form of Buona Franchise Agreement and such other then-current ancillary agreements as Franchisor may reasonably require.
The then-current form of the Franchise Agreement may contain new or significantly different terms, including but not limited to a higher royalty fee and advertising fund contribution and less territorial protection than contained in this Agreement.
The then-current form of the Franchise Agreement will expire on the expiration date of this Agreement and will contain the same renewal rights, if any, as are available to Franchisee under this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona will not unreasonably withhold written approval of a franchise transfer if certain conditions are met by both the franchisee and the proposed transferee. These conditions are determined by Buona at its sole discretion.
Specifically, the franchisee must not be in default of the franchise agreement or any other agreement with Buona or its affiliates at the time of the transfer request or when the transfer is scheduled to occur. All financial obligations to Buona and its affiliates must be paid in full. The franchisee must also agree to remain obligated under specific covenants as if the agreement were terminated on the transfer date.
The proposed transferee must be of good moral character and reputation, meeting Buona's current criteria for new franchisees. The terms of the transfer, including all financial aspects, must be provided to Buona in writing at least fifteen business days before the proposed transfer date and must receive written approval from Buona. Additionally, the transferee must execute a written assignment, assuming all obligations of the franchisee, or execute Buona's then-current franchise agreement, which may include different terms such as higher fees or less territorial protection.