What constitutes a 'transfer' by the developer under the Buona Area Development Agreement?

According to Buona's 2025 Franchise Disclosure Document, a transfer by the developer under the Area Development Agreement (ADA) includes the transfer of any interest in the ADA itself or in the developer entity. This means that any change in ownership or control of the development rights or the company holding those rights is considered a transfer.

Buona maintains strict control over who can develop franchises under the ADA. The FDD explicitly states that a developer has no right to transfer any interest in the ADA or the developer entity. Any attempt to do so is considered null and void, meaning it would not be recognized or permitted by Buona.

This restriction is significant for potential developers as it limits their ability to sell, assign, or otherwise transfer their development rights to another party. This lack of transferability could impact the developer's exit strategy or ability to capitalize on the value of the development agreement. Prospective developers should carefully consider this restriction and its potential implications for their investment and business plans.

It is common for franchise agreements and area development agreements to have restrictions on transfer to ensure the franchisor maintains control over who is granted the rights to operate or develop the brand. Buona's approach is stricter than some, as it prohibits any transfer by the developer, requiring developers to fully commit to the development schedule and operational standards set forth in the agreement.