What actions can Buona take if a Developer violates the non-compete covenants in the franchise agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
- 9.4 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of the Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
- 9.5 In addition to the foregoing covenants, you, your Owners, and/or affiliates shall be bound by and comply with the covenants contained in each Franchise Agreement entered into by them.
10. NOTICES
All notices required or permitted under this Agreement shall be in writing and shall be personally delivered, sent by U.S. Certified mail, Return Receipt Requested, or commercial overnight delivery service to the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party:
Notice to Franchisor: Chicago's Original Italian Beef Franchising LLC 7075 Veterans Blvd. Burr Ridge, Illinois 60527 Attn: Brian Lansu General Counsel BLansu@buona.com AND Joseph Buonavolanto III Executive Vice President JB3@buona.com Notice to Developer:
All written notices and reports permitted or required to be delivered by the provisions of this Agreement shall be addressed to the party to be notified at its most current principal business
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address of which the notifying party has been notified and shall be deemed so delivered (i) at the time delivered by hand; (ii) one (1) business day after deposit within commercial overnight courier, (iii) three (3) business days after placement in the U.S. Mail by Certified Mail, Return Receipt Requested, postage prepaid and addressed, or (iv) on the date of transmission if an e-mail is sent on business days during business hours and there is confirmation of transmission (and if not sent during business hours, as of the next business day).
11. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
- 11.1. It is understood and agreed by the parties hereto that this Agreement does not create a fiduciary relationship between them, that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer, partner, employee or servant of the other for any purpose whatsoever.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a Developer violates the non-compete covenants, Buona may seek an injunction prohibiting the conduct. Buona does not have to post a bond to obtain temporary and permanent injunctions and orders for specific performance to enforce the non-disclosure and non-competition obligations. The FDD states that a violation of the non-compete covenants would result in immediate and irreparable injury to Buona, for which no adequate remedy at law would be available.
Buona can seek injunctions and orders of specific performance to enforce provisions related to the use of their marks, non-disclosure, and non-competition obligations. They can also act to prohibit any action by the Developer or its owners that violates laws, endangers the public, or damages the goodwill associated with the Buona franchises. These measures can also be used to prevent any other irreparable harm to Buona's interests, enforce obligations upon termination or expiration of the agreement, and prohibit unauthorized assignments of interest in the agreement.
The Developer is responsible for covering all costs Buona incurs to obtain an injunction or order of specific performance. This includes reasonable attorneys' fees, expert witness fees, investigation costs, court costs, litigation expenses, and travel and living expenses. The Developer also agrees to waive any claims for damages if it is later determined that an injunction or specific performance order was issued improperly.
In addition to seeking injunctive relief, Buona retains the right to pursue any other available legal remedies. The existence of any claims the Developer may have against Buona does not constitute a defense against the enforcement of the non-compete covenants. These measures are designed to protect Buona's interests and ensure compliance with the terms of the franchise agreement.