For a Buona development agreement, what is the agreement contingent upon?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Pursuant to the above paragraph and the Development Schedule, the Development Fee under this Agreement is Dollars ($). | ||||
|---|---|---|---|---|
| 2.3 | A separate Franchise Agreement shall be executed for each additional Buona Restaurant. Upon the execution of each Franchise Agreement, the terms and conditions of such Franchise Agreement shall control the establishment and operation of such Buona Restaurant. | |||
| 3. | 3.1 | DEVELOPMENT OBLIGATIONS The terms and conditions of this Agreement are contingent upon you being in full compliance |
- 3.1 The terms and conditions of this Agreement are contingent upon you being in full compliance with the Development Schedule. In addition, you must at all times after the opening of each Buona Restaurant continuously maintain in operation pursuant to each Franchise Agreement at least the number of Buona Restaurants set forth in the Development Schedule, and your Owners must at all times own a majority control over the entity that owns each Buona franchise developed hereunder. You may develop and open any Buona Restaurant earlier than the date set forth in the Development Schedule as long as you do so in compliance with this Agreement and the applicable Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the terms and conditions of the Development Agreement are contingent upon the developer being in full compliance with the Development Schedule. This means the developer must adhere to the timelines and requirements outlined in the Development Schedule, which specifies when Franchise Agreements must be signed, leases or purchase agreements executed, and Buona restaurants commenced operations.
Furthermore, after opening each Buona restaurant, the developer must continuously maintain in operation at least the number of Buona Restaurants set forth in the Development Schedule. The owners of the development entity must also maintain majority control over the entity that owns each Buona franchise developed under the agreement. This ensures consistent operation and management of the Buona restaurants according to the franchisor's standards.
If the developer fails to meet the deadlines in the Development Schedule at the time of signing any additional franchise agreement, they will be required to pay the then-current initial franchise fee being charged to new franchisees if it is greater than $32,000. This condition incentivizes developers to adhere to the agreed-upon schedule and avoid delays in opening new Buona locations. Buona also stipulates that the developer can open restaurants earlier than the date set forth in the Development Schedule as long as they are in compliance with the Development Agreement and the applicable Franchise Agreement.