Is Buona permitted to establish company-owned or franchisee-operated businesses selling similar products under different trade names than the Buona Marks or System?

According to Buona's 2025 Franchise Disclosure Document, Buona retains the right to establish company-owned or franchisee-operated businesses that sell similar products and/or services under different trade names or trademarks other than the Buona Marks or System. This means that Buona can operate or franchise other businesses that compete with a franchisee's Buona restaurant, even if those businesses sell similar products. This right is retained without any compensation to the franchisee.

For franchisees entering into an Area Development Agreement with Buona, the company also reserves the right to establish businesses that are franchised, licensed, or owned by them or any affiliate at any locations they deem appropriate. These businesses can distribute products or services similar to those offered under the Buona system but under different trade names, trademarks, service marks, trade dress, or other commercial symbols.

This clause highlights a potential risk for franchisees. While franchisees are granted a Protected Area, Buona's ability to operate similar businesses under different brands could lead to competition within or near that area. Prospective franchisees should carefully consider the potential impact of such competition on their business and discuss this with Buona during their due diligence.

It is important to note that the terms and conditions of the Area Development Agreement, including the Development Schedule, can impact these rights. For example, failure to meet the deadlines in the Development Schedule could affect the franchisee's exclusive rights to the Development Area. Therefore, franchisees should fully understand the terms of both the Franchise Agreement and the Area Development Agreement.