Where can I find the important provisions of the Franchise Agreement related to the Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| r. Non-competition and Non- Solicitation covenants during the term of the franchise | Section 14.2, 14.4 | No involvement in Competitive Business anywhere and no diversion of any business or customers of the Buona Business. No solicitation of our employees or our franchisee’ employees. |
| s. Non-competition and non- solicitation covenants after the franchise is terminated or expires | Section 14.3 – 14.4 | No involvement in Competitive Business for 2 years within 10 miles of the site of any Buona Business, whether or not formerly owned by you, except owning less than 2% of the outstanding shares of a publicly traded security. No solicitation of our employees or our franchisees’ employees for 1 year. |
| t. Modification of agreement | Sections 7.1, | No modifications generally without mutual |
| 23.1, 25.1, 25.8 | consent, but the Manual is subject to change. | |
| t. Integration/merger clause | Section 23.1 | Only the terms of the Franchise Agreement and other related written agreements are binding (subject to state law). However, nothing in the Franchise Agreement or any related agreement is intended to disclaim our representations made in this Franchise Disclosure Document. Any representations or promises outside of the Franchise Disclosure Document and other agreement may not be enforceable. |
| u. Dispute resolution by | Sections 24.1 – | Illinois (subject to state law). |
| arbitration | 24.4 | |
| v. Choice of forum | Sections 24.5 | Illinois (subject to state law). |
| w. Choice of law | Sections 24.5 | Illinois (subject to state law). |
| Provision | Section in ADA | Summary |
| a. Length of term of the agreement | Section 4 | Agreement expires on our acceptance and execution of the Franchise Agreement for the last franchise to be developed. |
| b. Renewal or extension of the | Not applicable | Not applicable |
| term | ||
| c. Requirements for you to renew | Not applicable | Not applicable |
| or extend | ||
| d. Termination by you | Not applicable | Not applicable |
| e. Termination by us without cause | Not applicable | Not applicable |
| f. Termination by us with cause | Section 7 | We can terminate if you commit a listed violation. |
| g. "Cause" defined - defaults which | Section 7 | Not applicable |
| can be cured | ||
| h. "Cause" defined - defaults which cannot be cured | Section 7 | Bankruptcy or similar proceeding, failure to comply with development schedule, breach of the agreement, unauthorized transfer, breach of any Franchise Agreement. |
| i. Your obligations on termination/ non-renewal | Section 7.4 | No further right to develop; however, termination does not affect existing franchise agreements. |
| j. Assignment of contract by us. | Section 8.1 | We have an unrestricted right to assign. |
| k. "Transfer" by you – definition | Section 8.2 | Include transfer of any interest in the ADA or in the Developer. |
| l. Our approval of transfer by you | Section 8.2 | You have no right to transfer any interest in the ADA or Developer. Any attempted transfer will be null and void. |
| m. Conditions for our approval | Not applicable | Not applicable |
| of transfer | ||
| n. Our right of first refusal to | Not applicable | Not applicable |
| acquire your business | ||
| o. Our option to purchase your | Not applicable | Not applicable |
| business | ||
| p. Your death or disability | Not applicable | Not applicable |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 52–60)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Item 17 provides a summary of key provisions within both the Franchise Agreement and the Area Development Agreement (ADA). These summaries cover various aspects of the agreements, including renewal, termination, transfer, and dispute resolution.
Specifically, the table outlines the section in the Franchise Agreement or ADA where each provision is detailed, along with a brief summary of the provision's content. For instance, it identifies sections related to non-competition and non-solicitation covenants, both during and after the franchise term, modifications to the agreement, dispute resolution, and choice of law. The table also addresses the length of the agreement term, conditions for renewal or extension, termination rights and obligations, assignment of the contract, and transfer conditions.
For example, the non-competition covenant after termination or expiration of the franchise is found in Sections 14.3 – 14.4 of the Franchise Agreement. It states that you cannot be involved in a Competitive Business for 2 years within 10 miles of any Buona Business, with a minor exception for owning less than 2% of publicly traded securities. Additionally, you are prohibited from soliciting Buona's employees or its franchisees' employees for 1 year. Understanding these specific sections within the Franchise Agreement and ADA is crucial for any prospective Buona franchisee to fully grasp their rights and obligations.