Under the Area Development Agreement, what rights does Buona reserve within the Development Area?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Area Development Agreement, an exclusive territory is designated within which it is expected you will develop the multiple Buona Businesses during the term of the Area Development Agreement ("Development Area"). The Development Area will be described in Exhibit A to the Area Development Agreement. The size of the Development Area will vary and will depend on the number of restaurants you intend to open, our analysis of the market potential and your financial and operational abilities.
As long you are in compliance with the Development Schedule and otherwise in compliance with the Area Development Agreement, during the term of the Area Development Agreement, we will not establish, nor license anyone other than Developer the right to establish any Buona Business in the Development Area. We (and any affiliate) reserve the right:
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- To distribute products and services which are part of the System through any alternative distribution channels including, but not limited to, supermarkets and other retail facilities, wholesale sale, catalogs, direct marketing, the Internet or similar electronic media, using the Marks;
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- To establish businesses which are franchised, licensed or owned by us or any affiliate at any locations we deem appropriate or distribute products or services which are similar to the products and services offered under the System under trade names, trademarks, service marks, trade dress or other commercial symbols other than the Marks;
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- To acquire or be acquired by another franchisor establishing businesses identical or similar to the Buona Business, even if the other business operates, franchises, and/or licenses competitive businesses anywhere, including the Development;
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- To implement and maintain multi-area marketing programs at any time, including internet and regional or national accounts. We reserve the right to establish mandatory policies and procedures for these multi-area marketing programs;
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- to engage in any other business activities not expressly prohibited by the Area Development Agreement.
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- Your continued exclusive rights to the Development Area are dependent upon you meeting all of the deadlines in the Development Schedule.
Source: Item 12 — TERRITORY (FDD pages 46–48)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the company retains several rights within the Development Area granted to an Area Developer. Buona can distribute products and services of the system through alternative channels like supermarkets, wholesale, catalogs, direct marketing, the Internet, or similar electronic media, even using the Marks. They can also establish businesses that are franchised, licensed, or owned by them or any affiliate at locations they deem appropriate. These businesses may offer products or services similar to those in the Buona system but under different trade names or trademarks.
Buona reserves the right to be acquired by or merge with another franchisor, even if that franchisor operates businesses identical or similar to Buona, including competitive businesses within the Development Area. Additionally, Buona can implement and maintain multi-area marketing programs, including internet and regional or national accounts, and establish mandatory policies for these programs. Finally, Buona can engage in any other business activities not expressly prohibited by the Area Development Agreement.
These reservations of rights mean that while an Area Developer has an exclusive territory for developing Buona restaurants, Buona still has significant latitude to operate and market within that area through other channels and brands. A prospective Area Developer should carefully consider these rights and how they might impact the potential success of their Buona restaurants. It is important to note that the developer's continued exclusive rights are dependent on meeting all deadlines in the Development Schedule.