What happens to the rights to establish and open Buona Restaurants upon termination or expiration of the Development Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.4 Upon termination or expiration of this Agreement, all remaining rights granted to you to establish and open Buona Restaurants under this Agreement for which a Franchise Agreement has not been executed shall automatically be null and void.
You shall have no right to establish, open or operate any Buona Restaurants for which a Franchise Agreement has not been executed by us prior to the date of termination or expiration of this Agreement.
Upon termination or expiration of this Agreement, we will have the right to establish ourselves or through an affiliate or grant to a third party the right to establish a Buona Business within the Development Territory as long as there is no violation of the territorial protections granted to you under existing individual Franchise Agreements.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, upon termination or expiration of the Development Agreement, a developer's remaining rights to establish and open Buona Restaurants are null and void if a Franchise Agreement has not been executed. Specifically, the developer loses the right to open any Buona Restaurant for which a Franchise Agreement hasn't been finalized before the termination or expiration date.
Buona retains the right to establish restaurants within the Development Territory after the agreement ends, either directly or by granting those rights to an affiliate or a third party. However, this is conditional on not violating any territorial protections already in place under existing individual Franchise Agreements. This means that while Buona can develop new locations, they must respect the protected territories of existing franchisees.
This clause protects Buona's interests by allowing them to continue expanding even after a Development Agreement concludes, while also safeguarding the territorial rights of franchisees who have already invested in and are operating Buona restaurants. For a prospective developer, this highlights the importance of completing the development schedule and securing Franchise Agreements within the term of the Development Agreement to avoid losing the opportunity to establish further Buona locations in the designated territory.