During the term of the Buona franchise, is there a geographic limit to the non-competition covenant?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| r. Non-competition and Non- Solicitation covenants during the term of the franchise | Section 14.2, 14.4 | No involvement in Competitive Business anywhere and no diversion of any business or customers of the Buona Business. No solicitation of our employees or our franchisee’ employees. |
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, during the term of the franchise agreement, franchisees are subject to non-competition and non-solicitation covenants. Specifically, Section 14.2 and 14.4 of the Franchise Agreement state that franchisees cannot be involved in any Competitive Business anywhere and cannot divert any business or customers of the Buona Business. This means that during the term of the franchise, the non-compete agreement has no geographic limit.
This is a significant restriction for prospective Buona franchisees. It prevents them from engaging in any competitive business, regardless of location, while they are operating a Buona franchise. This could limit their ability to pursue other business ventures or investments during the term of their agreement.
It is important to note that this restriction applies only during the term of the franchise. After the franchise is terminated or expires, a different non-compete agreement takes effect, which does have a geographic limitation. The post-term non-compete restricts involvement in a Competitive Business for 2 years within 10 miles of any Buona Business site.