Does the Buona Development Agreement act as the franchise agreement itself?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
the Protected Area; and
- (d) to implement and maintain multi-area marketing programs at any time, including internet and regional or national accounts. Franchisor reserves the right to establish mandatory policies and procedures for these multi-area marketing programs; and
- (e) to engage in any other business activities not expressly prohibited by this Agreement.
- 1.4 This Agreement is not a Franchise Agreement, and you shall have no right to use in any manner the System or the Marks by virtue of entering into this Agreement.
- 1.5 Developer shall have no right under this Agreement to license others to operate a business or use the System or the Marks.
2. FEES
2.1 Concurrent with the execution of this Agreement, you must execute a Franchise Agreement for the first Buona Restaurant to be developed and pay the initial franchise fees of Forty Thousand Dollars ($40,000.00) due under said Franchise Agreement. The initial franchise fee for the remaining Franchise Agreements shall be Thirty-Two Thousand Dollars ($32,000.00)
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Development Agreement is explicitly not a Franchise Agreement. The FDD states that entering into the Development Agreement does not grant the developer any rights to use Buona's System or Marks.
For each Buona Restaurant to be developed, a separate Franchise Agreement must be executed. These individual Franchise Agreements are independent of the Development Agreement, meaning the continuation of one does not depend on the other. If any conflict arises between the Development Agreement and a Franchise Agreement, the Franchise Agreement takes precedence.
This distinction is important for prospective developers as it clarifies that the Development Agreement primarily outlines the terms for developing multiple Buona locations, while the Franchise Agreement governs the operation of each individual restaurant. Developers must fulfill the obligations of both agreements, but the rights and responsibilities for each restaurant are defined in its specific Franchise Agreement.