In the context of the Buona Area Development Agreement, what characteristics of the Developer's Owners are important to the Franchisor?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Owners of the Developer, and all such Owners must execute the Guaranty and Assumption of Obligations which is attached hereto as Exhibit C concurrently with the execution of this Agreement by Developer.
16. ACKNOWLEDGEMENTS
16.1 You and your Owners affirm that all information you have given to us in any and all applications, financial statements and other submissions is true, complete and accurate in all respects, with you expressly acknowledging that we are relying upon the truthfulness, completeness and accuracy of such information.
(g) Developer, or any of its shareholders, members, managers, partners, officers or directors verbally or physically assaults or abuses any officer, director, member, manager or employee of Franchisor or any of its Affiliates, or any Buona franchisee or employees of franchisees, after receiving a verbal or written warning against this conduct from Franchisor regarding this conduct.
9.1 Unless otherwise specified, the term "Developer" as used in this Section 9 shall include each and every Owner of Developer.
9.2 Developer specifically acknowledges that, pursuant to this Agreement, Developer will have access to the Confidential Information. Accordingly, Developer covenants that Developer and its Owners shall not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or entity:
(a) own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any Competitive Business or any entity which is franchises, licenses or develops Competitive Businesses within the Development Area, or within a ten (10) mile radius of any existing Buona Restaurant, except under a validly existing Franchise Agreement with Franchisor. You acknowledge and agree that, after the date of this Agreement, other Buona Restaurants may open, thereby expanding the geographical area in which you will not be able to compete with us. For purposes of this Section 9, a "Competitive Business" is defined as any retail establishment that derives more than ten percent (10%) of its gross sales from Italian beef and Italian sausage products and other Italian specialties.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the franchisor places importance on the honesty, integrity, and adherence to agreements by the owners of the development entity. All owners must guarantee the Area Development Agreement, meaning they are personally liable for the entity's obligations. Buona requires owners to affirm that all information provided in applications and financial statements is true, complete, and accurate, as the franchisor relies on this information.
The FDD stipulates that if any owner is indicted for, convicted of, or pleads guilty to a felony or any crime that Buona believes could adversely affect the brand, system, or goodwill, it can impact the agreement. Similarly, any verbal or physical assault or abuse by an owner towards Buona's officers, directors, employees, or other franchisees can lead to repercussions after a warning.
Post-termination, owners are restricted from engaging in competitive businesses within the Development Area or near existing Buona restaurants for two years. This includes owning, operating, consulting with, or having any interest in a Competitive Business, defined as any establishment deriving more than 10% of its gross sales from Italian beef, Italian sausage, and other Italian specialties. These restrictions ensure that owners cannot leverage confidential information gained during the agreement to directly compete with Buona after the agreement ends.
In summary, Buona seeks owners who are honest in their dealings, committed to fulfilling their obligations, and who will not engage in activities that could harm the brand's reputation or compete unfairly after the agreement concludes. These stipulations are designed to protect Buona's interests and maintain the integrity of its franchise system.