What happens to the franchisee's rights under the Buona franchise agreement upon termination or expiration?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
r requests in connection with an audit of Franchisee's Franchised Business under Section 4.7. of this Agreement, or refuses entry to Franchisor's representative for an inspection of the Franchised Business under Section 10.2(m).
XVII. EFFECT OF TERMINATION OR EXPIRATION
- 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 Franchised Business, and shall not thereafter, directly or indirectly, represent to the public that the restaurant is or was a Franchised 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;
- (c) In the event Franchisee continues to operate or subsequently begins to operate a restaurant or other business, Franchisee shall not use any reproduction, counterfeit, copy, or colorable imitation of the Marks in conjunction with such other business which is likely to cause confusion or mistake or to deceive, and further agrees to remove all unique markings, colors, décor, Marks and other features ("Trade Dress") that identify the Franchised Business as a former Franchised Business, and otherwise take all necessary steps to disassociate itself from the System and Franchisor, including but not limited to, the removal of signs and all Trade Dress from the premises of the Franchised
Business and destruction of printed materials.
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 Marks, trade names, trademarks, and service marks associated with the system. This includes ceasing the use of all signs, menus, advertising and promotional materials, stationery, forms, packaging, containers, and any other articles displaying the Marks.
Additionally, for a period of two years following the expiration or termination of the agreement, 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 franchised location or any other existing Buona Business. This restriction does not apply to ownership of less than 2% of the outstanding shares of a publicly-traded security. This ensures that franchisees do not directly compete with Buona after the agreement ends, protecting the brand's market position and goodwill.