What constitutes a default under the Buona Development Agreement related to 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 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.
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. This means that if a developer does not open the agreed-upon number of Buona restaurants within the timeframe specified in the Development Schedule, they will be in default of the agreement.
In addition to missing deadlines, a developer will also be in default if they fail to comply with any other term and condition of the Development Agreement, attempt to transfer, sell, or assign the agreement in violation of its terms, or if the developer or any entity owned by the Owners are in default under any individual Franchise Agreement with Buona or any other agreement to which Buona is a party.
Upon such a default, Buona has the discretion to terminate the Development Agreement and all rights granted to the developer without any opportunity to cure the default, reduce the number of Buona restaurants the developer has the right to establish and open, and reduce the corresponding Development Territory, or exercise any other rights and remedies available under applicable law. This could have significant financial and operational consequences for the developer, including the loss of development rights and potential legal liabilities.