What condition must a Buona franchisee meet to ensure the terms and conditions of the Development Agreement remain in effect?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
3. DEVELOPMENT OBLIGATIONS
- 3.1 The terms and conditions of this Agreement are contingent upon you being in full compliance with the Development Schedule. In addition, you must at all times after the opening of each Franchised Restaurant continuously maintain in operation pursuant to each Franchise Agreement at least the number of Franchised Restaurants set forth in the Development Schedule, and your Owners must at all times own a majority control over the entity that owns each Franchised Restaurant developed hereunder. You may develop and open any Franchised Restaurant earlier than the date set forth in the Development Schedule as long as you do so in compliance with this Agreement and the applicable Franchise Agreement.
- 3.2 You must develop each Franchised Restaurant in the following manner:
- (a) By giving us written notice of your intention to begin development of the next Franchised Restaurant at least thirty (30) days before the execution of the Franchise Agreement for the applicable restaurant;
- (b) By submitting to us a description of the proposed site, together with a letter of intent in a form approved by us or other evidence satisfactory to us which confirms your favorable prospects for obtaining the proposed site;
- (c) By executing the then-current form of the Franchise Agreement for the applicable restaurant at the approved si
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the terms and conditions of the Development Agreement are contingent upon the franchisee being in full compliance with the Development Schedule. This means the franchisee must adhere to the timeline and milestones outlined in the Development Schedule for opening new Buona restaurants.
In addition to adhering to the Development Schedule, the franchisee must continuously maintain in operation, after opening each restaurant, at least the number of Buona restaurants specified in the Development Schedule, pursuant to each Franchise Agreement. Furthermore, the franchisee's owners must maintain majority control over the entity that owns each Buona franchise developed under the agreement. This ensures consistent operation and management of the franchised locations.
To develop each Buona Restaurant, the franchisee must provide written notice of their intention to begin development at least thirty (30) days before executing the Franchise Agreement. They must also submit a description of the proposed site with a letter of intent or other evidence confirming favorable prospects for obtaining the site. The franchisee is also required to execute the current Franchise Agreement for the restaurant at the approved site and comply with its terms, as well as execute a lease or purchase agreement for the proposed site. Meeting all requirements for developing and opening the Buona Restaurant is also mandatory.
Failure to comply with the Development Schedule or any other terms of the Development Agreement can result in default. If a franchisee defaults, Buona has the right to terminate the agreement, reduce the number of restaurants the franchisee is allowed to open, or exercise other legal remedies. Therefore, maintaining compliance with the Development Schedule and all other terms is crucial for a Buona franchisee to keep the Development Agreement in good standing.