Can Buona assign the Development Agreement to another party?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
8. TRANSFERABILITY; ENTITY AS DEVELOPER
- 8.1 This Agreement is fully assignable by us and will inure to the benefit of any assignee or other legal successor to the interest of the Franchisor herein.
- 8.2 You understand and acknowledge that the rights granted to you in this Agreement are personal to you and that we granted them in reliance upon the qualifications of you or your Owners. You and your Owners shall not, directly or indirectly sell, assign, transfer, convey, give away, pledge, mortgage or otherwise encumber any interest in this Agreement or in Developer to any third party, and nothing in this Agreement shall be construed as granting you the right to do so. Any purported assignment, sale or transfer by Developer or its Owners shall be null and void and shall constitute a material default hereunder. Any such purported assignment or transfer occurring by operation of law or otherwise, including any assignment by or to any trustee in bankruptcy, shall be a material default of this Agreement. You have represented and hereby represent to us that you are entering into this Agreement with the intention of complying with its terms and conditions through the term of this Agreement and not for the purpose of resale of the developmental rights hereunder.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona has the right to assign the Development Agreement, while the developer's ability to do so is restricted. Buona is permitted to fully assign the Development Agreement to another party, and this assignment will benefit any assignee or legal successor.
However, the developer's rights under the agreement are personal and based on the qualifications of the developer and their owners. The developer and their owners are explicitly prohibited from directly or indirectly selling, assigning, transferring, conveying, giving away, pledging, mortgaging, or otherwise encumbering any interest in the Development Agreement to a third party.
Any attempt by the developer to assign or transfer the agreement is considered null and void, constituting a material default of the Development Agreement. This restriction applies to any transfer occurring by operation of law, including assignments to a trustee in bankruptcy. Buona emphasizes that the agreement is granted with the expectation that the developer intends to comply with its terms throughout the term, not for the purpose of reselling the developmental rights.