What is the effect of termination or expiration on the rights granted to the franchisee under the Buona agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.1 Post-Termination Obligations.
Upon termination or expiration of this Agreement, all rights granted to Franchisee under this Agreement will immediately terminate, Franchisee shall cease to be a licensed franchisee of Franchisor, and:
(a) Franchisee shall immediately cease to operate the Franchised Business as an Buona Business, and shall not thereafter, directly or indirectly, represent to the public that the restaurant is or was a Buona Business;
(b) Franchisee shall immediately and permanently cease to use, by advertising or in any manner whatsoever, any menus, recipes, confidential formulae, equipment, methods, procedures, techniques associated with the System, the Marks, and Franchisor's other trade names, trademarks and service marks associated with the System.
In particular, and without limitation, Franchisee shall cease to use all signs, menus, advertising and promotional materials, stationery, forms, packaging, containers and any other articles which display the Marks; Franchisee covenants that Franchisee and any of its shareholders, officers, directors, members, managers, partners and guarantors, either directly or indirectly, for itself or themselves or on behalf of, or in conjunction with, any other person or entity, regardless of the cause for termination shall not:
- (a) For a period of two (2) years following the expiration or termination of this Agreement, have any ownership interest in, maintain, operate, engage in, serve as a director, officer, manager, employee, consultant or representative of, grant a franchise to, advise, help, make loans to, lease property to, or have any interest in, directly or indirectly, a Competitive Business that is located within a radius of ten (10) miles of (i) the location specified in the Approved Site Location Addendum as described in Article I or (ii) the location of any other Buona Business, whether owned by Franchisor or any other Buona franchisee, in existence as of the date of expiration or termination of this Agreement.
This restriction will not apply to the ownership of less than 2% of the outstanding shares of a publicly-traded security.
- 14.4 Nondisclosure and Noncompetition Agreement*.* Franchisee must have its shareholders, officers, directors, members, managers, partners, guarantors, supervisory and principal employees, including managers and assistant managers (as a condition to their employment), anyone Franchisee may choose to send to training, and anyone who has access to the Manual or any of Franchisor's proprietary information or Confidential Information, execute Franchisor's standard Nondisclosure and Noncompetition Agreement (which is an exhibit to the Franchise Disclosure Document and as may be updated in the Manual) before performing any work at the Franchised Business or otherwise having access to Franchisor's proprietary information.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, all rights granted to the franchisee immediately terminate. The franchisee must cease operating as a Buona Business and cannot represent to the public that the restaurant is or was a Buona Business.
Furthermore, the franchisee must immediately and permanently stop using any menus, recipes, confidential formulas, equipment, methods, procedures, techniques associated with the Buona system, as well as the brand's trademarks and service marks. This includes discontinuing the use of all signs, menus, advertising and promotional materials, stationery, forms, packaging, containers, and any other items displaying the Buona marks.
For a period of two years following the expiration or termination, the franchisee is restricted from having any ownership interest in, maintaining, operating, or being involved with a Competitive Business within a 10-mile radius of the former Buona location or any other Buona Business. This restriction does not apply to ownership of less than 2% of the outstanding shares of a publicly-traded security. Franchisees must also ensure that their shareholders, officers, directors, members, managers, partners, guarantors, supervisory and principal employees, including managers and assistant managers, execute Buona's standard Nondisclosure and Noncompetition Agreement.