What rights does Buona have regarding establishing or granting franchises after the termination or expiration of the Development Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the termination or expiration of the Development Agreement, any remaining rights for the developer to establish and open Buona Restaurants for which a Franchise Agreement has not been executed become null and void. The developer loses the right to establish, open, or operate any Buona Restaurants if a Franchise Agreement hasn't been executed by Buona before the termination or expiration date.
Buona retains the right to establish a Buona business themselves, through an affiliate, or grant a third party the right to establish a Buona business within the Development Territory. This is allowed as long as it doesn't violate any territorial protections granted to the developer under existing individual Franchise Agreements.
In practical terms, this means that a developer's rights to expand within a territory are contingent on maintaining an active Development Agreement and executing Franchise Agreements in a timely manner. If the agreement terminates, Buona regains control over the territory and can pursue other franchising opportunities within it, subject to existing franchisees' territorial rights. This clause incentivizes developers to adhere to the development schedule and fulfill their obligations under the Development Agreement.