In the event of a conflict between the Development Agreement and a Franchise Agreement for a Buona Restaurant within the Development Area, which agreement takes precedence?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
14. SUPERIORITY OF FRANCHISE AGREEMENT
For each Buona Restaurant developed in the Development Area, a separate Franchise Agreement shall be executed and the individual franchise fee as prescribed hereunder shall be paid to us. It is understood and agreed by you that any and all Franchise Agreements executed in connection with Buona Restaurants developed by you within the Development Area under this Agreement are independent of this Agreement. The continued existence of any such Franchise Agreement shall not depend on the continuing existence of this Agreement. If any conflict shall arise in connection with this Agreement and any Franchise Agreement executed within the Development Area, the Franchise Agreement shall have precedence and superiority over this Agreement.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if there is a conflict between the Area Development Agreement and any Franchise Agreement executed within the Development Area, the Franchise Agreement takes precedence. This means that the terms outlined in the Franchise Agreement will supersede any conflicting terms in the Development Agreement.
For a prospective Buona developer, this clause offers a degree of security and clarity as they establish individual franchise locations within their designated area. The Development Agreement sets the stage for the overall expansion plan, but the Franchise Agreement governs the specifics of each restaurant's operation. This ensures that the most current and relevant terms apply to each individual Buona restaurant.
This clause is fairly standard in franchise development agreements. It reflects the understanding that as each franchise location becomes operational, its specific Franchise Agreement should dictate the terms of operation. This approach allows Buona to maintain consistency and control over individual franchise operations while still accommodating the broader development plan outlined in the Development Agreement.