After termination or expiration of a Buona franchise, for how long is involvement in a Competitive Business restricted, and within what geographic area?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| s. Non-competition and non- solicitation covenants after the franchise is terminated or expires | Section 14.3 – 14.4 | No involvement in Competitive Business for 2 years within 10 miles of the site of any Buona Business, whether or not formerly owned by you, except owning less than 2% of the outstanding shares of a publicly traded security. No solicitation of our employees or our franchisees’ employees for 1 year. |
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, if the franchise is terminated or expires, the franchisee is subject to certain non-competition restrictions. Specifically, for a period of two years, the franchisee cannot be involved in a Competitive Business within 10 miles of the site of any Buona Business. There is an exception to this restriction: the franchisee can own less than 2% of the outstanding shares of a publicly traded security.
In addition to the non-competition covenant, there is also a non-solicitation covenant. For one year after termination or expiration, the franchisee is prohibited from soliciting Buona's employees or its franchisees' employees.
These post-term restrictions are common in franchising to protect the brand and prevent franchisees from using the franchisor's confidential information and business model to compete against the system after leaving. Prospective Buona franchisees should carefully consider these restrictions and how they might impact their future business opportunities should they decide to leave the Buona system.