If a Buona developer attempts to transfer their interest in the ADA, what is the consequence?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in ADA | Summary | |
|---|---|---|---|
| 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. |
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, a developer is not permitted to transfer any interest in the Area Development Agreement (ADA) or in the developer entity itself. The FDD clearly states that any attempt to make such a transfer will be considered null and void. This restriction is in place to ensure that Buona maintains control over who is developing their franchise locations and that the developers meet their standards.
This provision is significant for potential Buona developers because it means they cannot sell or transfer their rights to develop restaurants in a specific area to another party without Buona's consent. If a developer wishes to exit the agreement, they cannot simply transfer it to someone else; instead, they would likely need to negotiate a termination or buyout with Buona. This lack of transferability could limit a developer's flexibility and potential return on investment.
It is important for prospective developers to carefully consider this restriction and its implications for their long-term plans. They should discuss with Buona what options might be available if they need to exit the agreement early due to unforeseen circumstances. Understanding these limitations is crucial before entering into an Area Development Agreement with Buona.