What is the exception to the protected area for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
with a description of the Buona Protected Area. Franchisee is not granted a protected area or any exclusive rights relating to The Original Rainbow Cone portion of the Franchised Business.
1.4 Limitations to Protected Area. The provisions of Section 1.3 shall not apply if the Franchised Business is operated in any of the following types of locations and/or with respect to such locations within the Buona Protected Area ("Captive Locations"), at which Franchisor retains the right, in its sole discretion, to franchise and/or operate Franchised Businesses, and to distribute by any means products and services of the System:
(a) Transportation facilities (including but not limited to airports, train stations, bus stations, etc.);
(b) Educational facilities (including but not limited to schools, colleges and universities);
(c) Institutional feeding facilities (including but not limited to hospitals, hotels, and corporate or school cafeterias);
- (d) Government institutions and facilities such as military bases;
- (e) Enclosed shopping malls;
- (f) Entertainment venues, including casinos;
- (g) Sports stadiums; and
- (h) Amusement and/or theme parks.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, while a franchisee typically receives a protected area as defined in Exhibit A, this protection does not extend to certain 'Captive Locations.' Buona retains the right to franchise or operate businesses, and distribute products and services within these locations, even if they fall within a franchisee's protected area.
The specified 'Captive Locations' include transportation facilities like airports, train stations, and bus stations. Educational facilities such as schools, colleges, and universities are also included. Additionally, institutional feeding facilities, such as hospitals, hotels, and corporate or school cafeterias, are considered exceptions to the protected area. Government institutions and facilities, including military bases, are also on the list.
Furthermore, the protected area does not apply to enclosed shopping malls, entertainment venues like casinos, sports stadiums, and amusement or theme parks. This means that Buona can establish a franchise within these locations, even if they are within another franchisee's defined protected area. This exception allows Buona to pursue opportunities in high-traffic or strategic locations without being restricted by existing franchise territories.
This policy has significant implications for prospective franchisees. While a protected area offers a degree of exclusivity, franchisees should be aware that Buona can still establish a presence in these Captive Locations within their territory. Franchisees should consider the potential impact of these exceptions when evaluating a location and its protected area. It is also important to note that the franchisee does not have any protected rights to The Original Rainbow Cone portion of the business.