What condition must a Buona developer meet to have rights of first refusal after completing the Development Schedule and the termination of exclusive rights to the Development Area?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.2 Following the completion of the Development Schedule and the termination of your exclusive rights to the Development Area, provided you are in full compliance with this Agreement, you shall have the rights of first refusal set forth below:
- (a) In the event we seek to establish or license others to establish a Buona Restaurant within the Development Area, we shall first offer you the option to establish such additional Buona Restaurants under our then-current terms and conditions. We shall provide you with written notice of our intent to establish or license another to establish an additional Buona Restaurant along with a general description of the proposed Buona Restaurant, a copy of the then-current Franchise Disclosure Document and Franchise Agreement and all other documents we deem necessary to include with the notice. You shall have thirty (30) days from the receipt of our notice to exercise the option to establish such additional Buona Restaurants by executing the Franchise Agreement and all other documents we require for such additional Buona Restaurants and to pay the initial fee due under the agreement. If you fail to execute the Franchise Agreement and other required documents and to pay the initial fee required under the Franchise Agreement within the said thirty (30) day period, you shall have no further right to establish or operate such additional Buona Restaurant. Notwithstanding the foregoing, in the event our bona fide arrangements or agreements with a bona fide third party, the lease restrictions for the proposed premises of the Buona Restaurant, or other circumstances or conditions related to the establishment of the additional Buona Restaurant, prevent or restrict you from operating the additional Buona Restaurant or restrict or prevent us from offering you the rights set forth in this Paragraph, we shall have no obligation to offer you the right to establish or operate the additional Buona Restaurant.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a developer must be in full compliance with the Development Agreement to have rights of first refusal. This right applies after completing the Development Schedule and after the termination of the developer's exclusive rights to the Development Area.
If Buona seeks to establish or license others to establish a Buona Restaurant within the Development Area, they must first offer the developer the option to establish additional Buona Restaurants under the then-current terms and conditions. Buona will provide written notice of their intent, including a general description of the proposed restaurant, a copy of the current Franchise Disclosure Document and Franchise Agreement, and any other necessary documents.
The developer then has thirty days from receipt of the notice to exercise their option. This requires executing the Franchise Agreement and all other required documents, as well as paying the initial fee. Failure to comply within this 30-day period means the developer loses the right to establish or operate the additional Buona Restaurant. However, Buona is not obligated to offer this right of first refusal if arrangements with a third party, lease restrictions, or other circumstances prevent the developer from operating the additional restaurant or prevent Buona from offering the right.