Is the continuation of exclusive development rights for the Development Area dependent on meeting all deadlines in the Buona Development Schedule?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Your continued exclusive rights to the Development Area are dependent upon you meeting all of the deadlines in the Development Schedule.
If you default in your obligations under the Development Schedule, we may, in our sole discretion, do any one or more of the following: (i) immediately terminate the Area Development Agreement and all rights granted under to you without affording you any opportunity to cure the default effective by delivery to you of a written notice from us; (ii) reduce the number of Buona Restaurants which you have the right to establish and open pursuant to the Development Agreement; or (iii) exercise any other rights and remedies which we may have under applicable law. Otherwise, we do not alter your territorial rights.
Source: Item 12 — TERRITORY (FDD pages 46–48)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the continuation of a developer's exclusive rights to their Development Area is dependent on meeting all deadlines in the Development Schedule. This is outlined in Item 12, which discusses territory. If a developer fails to meet these deadlines, Buona has the right to take certain actions.
Specifically, Buona can choose to immediately terminate the Area Development Agreement without allowing any opportunity to correct the default. This termination becomes effective upon delivery of a written notice. Alternatively, Buona can reduce the number of Buona restaurants the developer is entitled to establish and open under the Development Agreement. Buona also reserves the right to exercise any other legal rights and remedies available to them under applicable law.
This condition is significant for prospective Buona developers as it emphasizes the importance of adhering to the Development Schedule. Failure to meet deadlines can result in losing the exclusive territory, having the number of restaurants reduced, or even complete termination of the agreement. Therefore, developers must carefully assess their ability to meet the schedule before entering into an Area Development Agreement with Buona. This is a fairly standard clause in area development agreements, as franchisors want to ensure that developers are actively expanding the brand.