After termination or expiration of the Buona Development Agreement, under what condition can the franchisor establish a Buona business within the Development Territory?

According to Buona's 2025 Franchise Disclosure Document, after the termination or expiration of the Development Agreement, Buona has the right to establish a Buona business within the Development Territory. This is permissible as long as it does not violate the territorial protections granted to the developer under existing individual Franchise Agreements. This means that while the Development Agreement itself may end, any existing franchise agreements within that territory still hold, and Buona must respect those agreements.

This clause protects franchisees who have already established locations under individual franchise agreements within the development territory. Even if the Development Agreement expires or is terminated, their territorial rights remain intact. Buona cannot simply open a new corporate-owned location or grant a franchise to someone else that would infringe on the protected territory of an existing franchisee.

For a prospective developer, this highlights the importance of understanding the interplay between the Development Agreement and individual Franchise Agreements. While the Development Agreement grants the right to develop a territory, the individual Franchise Agreements define the specific territorial protections for each restaurant. Developers should carefully consider the terms of both agreements to understand their rights and obligations.

It is also important to note that the FDD mentions the possibility of Buona granting franchises and/or development rights for The Original Rainbow Cone Restaurants within any Development Area specified only for the development of a Buona Restaurant. This could be a factor for developers to consider, especially if they are interested in potentially diversifying their holdings with another brand under the same franchise system.