What conditions must be met for Buona to be obligated to execute a Franchise Agreement with a developer?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
We will be obligated to execute the Franchise Agreement only if (i) you continue to maintain the requisite knowledge, experience, skills, and financial resources to perform as a franchisee, (ii) you are in compliance with this Agreement, including but not limited to compliance with the Development Schedule and in compliance with the in-term covenants set forth in Paragraph 6.4, (iii) you (and/or an affiliate) are in compliance any and all existing Franchise Agreements between us.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona is only obligated to execute a Franchise Agreement if the developer meets certain conditions. These conditions ensure that the developer is capable and compliant, protecting Buona's brand and system.
Specifically, Buona will only execute a Franchise Agreement if the developer: (1) maintains the necessary knowledge, experience, skills, and financial resources to operate as a franchisee; (2) is in full compliance with the Development Agreement, including adherence to the Development Schedule and in-term covenants; and (3) is in compliance with all existing Franchise Agreements between Buona and the developer or their affiliates.
These stipulations mean a prospective Buona developer must maintain their capabilities and meet all contractual obligations to ensure Buona fulfills its obligation to execute further Franchise Agreements. Failure to meet these conditions could result in Buona not being obligated to proceed with additional franchise locations, potentially hindering the developer's expansion plans.