What are the specific obligations of the developer regarding the Confidential Information of Buona during and after the term of the agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
otherwise, including any assignment by or to any trustee in bankruptcy, shall be a material default of this Agreement. You have represented and hereby represent to us that you are entering into this Agreement with the intention of complying with its terms and conditions through the term of this Agreement and not for the purpose of resale of the developmental rights hereunder.
9. POST-TERMINATION COVENANTS
- 9.1 Unless otherwise specified, the term "Developer" as used in this Section 9 shall include each and every Owner of Developer.
- 9.2 Developer specifically acknowledges that, pursuant to this Agreement, Developer will have access to the Confidential Information. Accordingly, Developer covenants that Developer and its Owners shall not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or entity:
- (a) own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any Competitive Business or any entity which is franchises, licenses or develops Competitive Businesses within the Development Area, or within a ten (10) mile radius of any existing Buona Restaurant, except under a validly existing Franchise Agreement with Franchisor. You acknowledge and agree that, after the date of this Agreement, other Buona Restaurants may open, thereby expanding the geographical area in which you will not be able to compete with us. For purposes of this Section 9, a "Competitive Business" is defined as any retail establishment that derives more than ten percent (10%) of its gross sales from Italian beef and Italian sausage products and other Italian specialties.
- (b) directly or indirectly divert or attempt to divert any former business or customer of a Buona Restaurant to any competitive business; and
- (c) employ or seek to employ any person employed by us or our affiliate or by any other Buona Restaurant franchisee, or otherwise directly or indirectly induce or seek to induce such person to leave his or her employment, subject to applicable law;
The ownership of two percent (2%) or less of a publicly traded Franchisor will not be deemed to be prohibited by this paragraph.
9.3 Court Modification of Agreement**.** You agree that this form of Agreement is prepared for use
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in many jurisdictions with differing public policies and that such public policies change. Accordingly, you agree that the prevailing non-competition restrictions set forth above may be modified by a Court to the extent necessary to make the non-competition agreements valid and enforceable against you.
- 9.4 Enforcement of Covenants Not to Compete. You acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to us for which no adequate remedy at law will be available. Accordingly, you hereby acknowledge that we may seek to obtain the entry of an injunction prohibiting any conduct by you or your Owners in violation of the terms of the covenants not to compete set forth in this Agreement. You expressly agree that it may conclusively be presumed that any violation of the terms of said covenants not to compete was accomplished by and through your unlawful use of the Confidential Information. Further, you expressly agree that the existence of any claims you may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by us of the covenants not to compete set forth in this Agreement. You further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by us in connection with the enforcement of those covenants not to compete set forth in this Agreement.
- 9.5 In addition to the foregoing covenants, you, your Owners, and/or affiliates shall be bound by and comply with the covenants contained in each Franchise Agreement entered into by them.
10. NOTICES
All notices required or permitted under this Agreement shall be in writing and shall be personally delivered, sent by U.S. Certified mail, Return Receipt Requested, or commercial overnight delivery service to the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party:
Notice to Franchisor: Chicago's Original Italian Beef Franchising LLC 7075 Veterans Blvd. Burr Ridge, Illinois 60527 Attn: Brian Lansu General Counsel BLansu@buona.com AND Joseph Buonavolanto III Executive Vice President JB3@buona.com Notice to Developer:
All written notices and reports permitted or required to be delivered by the provisions of this Agreement shall be addressed to the party to be notified at its most current principal business
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address of which the notifying party has been notified and shall be deemed so delivered (i) at the time delivered by hand; (ii) one (1) business day after deposit within commercial overnight courier, (iii) three (3) business days after placement in the U.S. Mail by Certified Mail, Return Receipt Requested, postage prepaid and addressed, or (iv) on the date of transmission if an e-mail is sent on business days during business hours and there is confirmation of transmission (and if not sent during business hours, as of the next business day).
11. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
- 11.1. It is understood and agreed by the parties hereto that this Agreement does not create a fiduciary relationship between them, that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer, partner, employee or servant of the other for any purpose whatsoever. Each party to this Agreement is an independent contractor, and neither shall be responsible for the debts or liabilities incurred by the other.
- 11.2 Developer shall hold itself out to the public to be an independent contractor operating pursuant to this Agreement. You agree to take such actions as shall be necessary or as directed by us to that end.
- 11.3 You understand and agree that nothing in this Agreement authorizes you to make any contract, agreement, warranty or representation on our behalf, or to incur any debt or other obligation in our name, and that we assume no liability for, nor shall we be deemed liable by reason of, any act or omission by you in the conduct of your business, or any claim or judgment arising therefrom. You shall indemnify and hold us, our officers, directors, employees and agents harmless against any and all such claims directly or indirectly from, as a result of, or in connection with your business operations under this Agreement or under any Franchise Agreement, as well as the costs, including attorneys' fees, of defending against them.
12. DISPUTE RESOLUTION
12.1 Mandatory Mediation.Except as otherwise specifically provided herein, prior to the initiation of litigation by either party pursuant to this Agreement, the parties must make a good faith effort to resolve any controversies between them by non-binding mediation either through a mutually acceptable mediator or through an established mediation service selected by Franchisor (in either case, "Mediator"). Mediation shall take place in the Cook County, Illinois.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, developers have specific obligations regarding confidential information, both during and after the term of the agreement. During the term of the agreement, the developer's relationship with Buona does not grant them any interest in the Confidential Information other than the right to use it in the development of Buona Restaurants. The use or duplication of the Confidential Information in any other business would be considered an unfair method of competition, a breach of the agreement, and copyright infringement. Confidential Information includes the Manual, operational standards, recipes, marketing materials, and other know-how related to the Buona Restaurant system. Developers must also comply with non-disclosure and non-competition obligations as outlined in Section 6 of the agreement.
After the agreement terminates or expires, the developer and their owners are restricted from certain activities for a period of two years. Specifically, they cannot own, operate, or consult with any Competitive Business within the Development Area or within a 10-mile radius of any existing Buona Restaurant. A Competitive Business is defined as any retail establishment that derives more than 10% of its gross sales from Italian beef, Italian sausage products, and other Italian specialties.
Furthermore, developers are prohibited from diverting business or customers away from Buona Restaurants to any competitive business and from employing or soliciting employees of Buona or its franchisees. These post-termination covenants are designed to protect Buona's confidential information and market position. The definition of Confidential Information includes manuals, standards, recipes, marketing materials, customer information, and other data related to the franchised business.
Developers must use their best efforts to protect this information and can only disclose it to employees who need access to fulfill their obligations under the agreement or as required by law, with prior written notice to Buona. Buona also reserves the right to require confidentiality agreements from the developer, their owners, officers, and employees. These measures ensure the continued protection of Buona's proprietary information and competitive advantage.