What is the consequence of not meeting the development schedule outlined in Exhibit B of the Buona Area Development Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.3 If you (i) fail to meet any of the deadlines set forth in the Development Schedule; (ii) fail to comply with any other term and condition of this Agreement; (iii) make or attempt to make a transfer, sale or assignment of this Agreement in violation of this Agreement; or (iv) you or other entity owned by the Owners are in default under any individual Franchise Agreement with us, or of any other agreement to which we are parties; any such event shall constitute a default under this Agreement.
Upon any such default, we, in our sole discretion, may do any one or more of the following:
(a) Terminate this Agreement and all rights granted hereunder to you without affording you any opportunity to cure the default effective immediately upon delivery to you of a written notice from us;
(b) Reduce the number of Buona Restaurants which you have the right to establish and open pursuant to this Agreement and reduce the corresponding Development Territory; or
(c) Exercise any other rights and remedies which we may have under applicable law.
7.4 Upon termination or expiration of this Agreement, all remaining rights granted to you to establish and open Buona Restaurants under this Agreement for which a Franchise Agreement has not been executed shall automatically be null and void.
You shall have no right to establish, open or operate any Buona Restaurants for which a Franchise Agreement has not been executed by us prior to the date of termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, failing to meet the deadlines outlined in the Development Schedule (Exhibit B of the Area Development Agreement) constitutes a default under the agreement. If a developer fails to meet any of the deadlines in the Development Schedule or comply with any other term or condition of the Area Development Agreement, Buona, at its sole discretion, can take certain actions.
Buona has the option to terminate the Area Development Agreement and all rights granted to the developer immediately upon written notice, without any opportunity for the developer to correct the failure. Alternatively, Buona can reduce the number of Buona restaurants the developer has the right to establish and open, along with a corresponding reduction in the Development Territory. Buona can also exercise any other rights and remedies available under applicable law.
Upon termination or expiration of the Area Development Agreement, all remaining rights granted to the developer to establish and open Buona restaurants for which a Franchise Agreement has not been executed become null and void automatically. The developer loses the right to establish, open, or operate any Buona restaurants if a Franchise Agreement has not been executed by Buona before the termination or expiration date of the Area Development Agreement. This could result in a loss of investment and opportunity for the developer.