Upon termination of the Buona franchise agreement, will any monetary amount be assigned to the franchisee for goodwill associated with their activities?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.5 Acknowledgements.
Upon the termination or expiration of this Agreement for any reason, Franchisee acknowledges and agrees that:
(a) No payment is due to Franchisee from any source for any claimed goodwill or other equity claimed by Franchisee based on Franchisee's operation or ownership of the Franchised Business, or otherwise; and
(b) No fees, charges, or other payments of any kind from Franchisee to Franchisor or its Affiliates are refundable wholly or partially.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a franchisee will not receive any payment for claimed goodwill or other equity based on their operation or ownership of the franchised business upon termination or expiration of the Franchise Agreement. The agreement explicitly states that no payment is due to the franchisee from any source for claimed goodwill or other equity. Additionally, no fees, charges, or other payments from the franchisee to Buona or its affiliates are refundable, either wholly or partially.
This means that when a Buona franchise agreement ends, the franchisee should not expect to be compensated for any perceived value they have built in the business beyond the tangible assets if Buona chooses to purchase them. This is a standard practice in many franchise systems, as the brand's goodwill typically belongs to the franchisor.
Prospective Buona franchisees should be aware of this provision, as it affects the potential return on investment when exiting the franchise system. It is essential to factor this into financial planning and understand that the value of the business as a going concern may not be realized upon termination or expiration of the agreement.