How are the Protected Areas determined for each Buona Business developed under the Area Development Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
As you develop each Buona Business under the Area Development Agreement, the Protected Area granted under each Franchise Agreement will be based on our then-current standards for granting protected areas, which may differ from standards for protected areas granted to franchisees under this Disclosure Document.
For the single brand Buona Business, you will be granted an exclusive territory, referred to as the "Protected Area." During the term of the Franchise Agreement, provided Franchisee or any of its affiliated companies is not in default of the Franchise Agreement or any agreement with us, a parent, subsidiary or affiliate, we will not establish, nor grant another the right to establish a Buona Restaurant within the Protected Area that will be described in Exhibit C to the Franchise Agreement. Once the Approved Location has been determined, we shall complete Exhibit A to the Franchise Agreement with the description of the Protected Area. The Protected Area will be a ½ mile radius from the Approved Location in an urban area, and otherwise will have a minimum population of 60,000.
If you are establishing a Dual Brand Business, you will have a Protected Area of a ½ mile radius from the Approved Location in an urban area, and otherwise will have a minimum population of 60,000 for the Buona Business. You will not be granted a Protected Area for The Original Rainbow Cone. For the Original Rainbow Cone business, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — TERRITORY (FDD pages 46–48)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Protected Area granted for each Buona Business developed under an Area Development Agreement will be based on Buona's standards at the time each individual franchise agreement is signed. These standards may differ from those outlined in the current Franchise Disclosure Document.
For a single brand Buona Business, the franchisee is granted an exclusive territory, referred to as the "Protected Area." This area is typically a ½ mile radius from the Approved Location in an urban area, and otherwise will have a minimum population of 60,000. However, the FDD indicates that these standards may change over time.
It's important to note that if a franchisee establishes a Dual Brand Business (Buona and The Original Rainbow Cone), the Protected Area of a ½ mile radius from the Approved Location in an urban area, and otherwise will have a minimum population of 60,000 only applies to the Buona Business. No exclusive territory is granted for The Original Rainbow Cone portion of the Dual Brand Business, meaning franchisees may face competition from other franchisees, outlets Buona owns, or other distribution channels or competitive brands that Buona controls.
Prospective franchisees should inquire about the specific standards Buona uses to determine Protected Areas at the time of signing the Franchise Agreement to fully understand the extent of their exclusive territory. They should also consider the potential impact of these standards changing over time, as well as the lack of a Protected Area for The Original Rainbow Cone in a Dual Brand Business.