What constitutes a default under the Buona Development Agreement if the developer fails to meet deadlines in the Development Schedule?
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 Franchised 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.
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 constitutes a default under the Development Agreement. Specifically, if a developer fails to meet any of the deadlines set forth in the Development Schedule, this is considered an event of default.
In addition to missing deadlines, other actions can trigger a default. These include failing to comply with any other term or condition of the Development Agreement, attempting to transfer, sell, or assign the agreement in violation of its terms, or being in default under any individual Franchise Agreement or any other agreement with Buona.
Upon default, Buona has the discretion to take several actions. These include terminating the Development Agreement immediately without an opportunity to cure the default, reducing the number of Buona restaurants the developer has the right to establish and open, along with a corresponding reduction in the Development Territory, or exercising any other rights and remedies available under applicable law. This means that Buona has significant power to enforce the Development Schedule and other terms of the agreement, and developers need to be diligent in meeting their obligations.