Does the Buona Development Agreement contain or create any right to renewal?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
4. TERM AND RIGHT OF FIRST REFUSAL
- 4.1 Unless sooner terminated in accordance with the terms of this Agreement, the term of this Agreement shall expire on the date you sign a Franchise Agreement for the last franchise to be developed under this Agreement. The term of this Agreement is not related or affected by the term of any franchise agreement, lease, or other agreement related to any Buona Restaurant. This Agreement does not contain or create any right to renewal. Notwithstanding Section 4.2 below, any and all rights in the Development Area granted to you under this Agreement expire upon the expiration of this Agreement.
- 4.2 Following the completion of the Development Schedule and the termination of your exclusive rights to the Development Area, provided you are in full compliance with this Agreement, you shall have the rights of first refusal set forth below:
- (a) In the event we seek to establish or license others to establish a Buona Restaurant within the Development Area, we shall first offer you the option to establish such additional Buona Restaurants under our then-current terms and conditions. We shall provide you with written notice of our intent to establish or license another to establish an additional Buona Restaurant along with a general description of the proposed Buona Restaurant, a copy of the then-current Franchise Disclosure Document and Franchise Agreement and all other documents we deem necessary to include with the notice. You shall have thirty (30) days from the receipt of our notice to exercise the option to establish such additional Buona Restaurants by executing the Franchise Agreement and all other documents we require for such additional Buona Restaurants and to pay the initial fee due under the agreement. If you fail to execute the Franchise Agreement and other required documents and to pay the initial fee required under the Franchise Agreement within the said thirty (30) day period, you shall have no further right to establish or operate such additional Buona Restaurant. Notwithstanding the foregoing, in the event our bona fide arrangements or agreements with a bona fide third party, the lease restrictions for the proposed premises of the Buona Restaurant, or other circumstances or conditions related to the establishment of the additional Buona Restaurant, prevent or restrict you from operating the additional Buona Restaurant or restrict or prevent us from offering you the rights set forth in this Paragraph, we shall have no obligation to offer you the right to establish or operate the additional Buona Restaurant.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Development Agreement does not contain or create any right to renewal. The term of the Development Agreement expires when you sign a Franchise Agreement for the last franchise to be developed under the Development Agreement. The Development Agreement's term is not related to or affected by the term of any franchise agreement, lease, or other agreement related to any Buona Restaurant.
However, following the completion of the Development Schedule and the termination of your exclusive rights to the Development Area, provided you are in full compliance with the Development Agreement, you have a right of first refusal. If Buona seeks to establish or license others to establish a Buona Restaurant within the Development Area, they must first offer you the option to establish such additional Buona Restaurants under their then-current terms and conditions.
Buona will provide you with written notice of their intent to establish or license another to establish an additional Buona Restaurant, along with a general description of the proposed Buona Restaurant, a copy of the then-current Franchise Disclosure Document and Franchise Agreement, and all other documents they deem necessary to include with the notice. You have thirty days from the receipt of the notice to exercise the option to establish such additional Buona Restaurants by executing the Franchise Agreement and all other required documents and to pay the initial fee due under the agreement. If you fail to execute the Franchise Agreement and other required documents and to pay the initial fee required under the Franchise Agreement within the thirty-day period, you have no further right to establish or operate such additional Buona Restaurant.