After termination of the Buona agreement, is a Developer prohibited from soliciting employees of Buona or its franchisees?
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.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a Developer is restricted from soliciting employees of Buona or its franchisees for a period of two years after the termination or expiration of the Development Agreement. This restriction applies regardless of the reason for termination. Specifically, the Developer is prohibited from employing or seeking to employ anyone who is employed by Buona, its affiliates, or any other Buona Restaurant franchisee.
This post-termination covenant also prevents the Developer from directly or indirectly inducing or seeking to induce any such person to leave their employment. This means a former Developer cannot actively recruit or encourage current employees of Buona or its franchisees to leave their positions and work for a competing business. This restriction is subject to applicable law, meaning that local or federal regulations may impact the enforceability or scope of this covenant.
The term "Developer" includes each and every Owner of the Developer. This ensures that the non-solicitation clause applies not only to the development company itself but also to the individuals who own the company. This is a common practice in franchising to prevent individuals from circumventing the agreement by acting through other entities or as individuals.
This restriction is designed to protect Buona's investment in its employees and the stability of its franchise network. By preventing former Developers from poaching employees, Buona aims to maintain the consistency and quality of service across its locations. Prospective Developers should be aware of this restriction and factor it into their post-termination plans, as violating this covenant could result in legal action by Buona.