Under what circumstances is Buona not obligated to offer the developer the right to establish or operate an additional Franchised Restaurant?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the foregoing, in the event our bona fide arrangements or agreements with a bona fide third party, the lease restrictions for the proposed premises of the Buona Restaurant, or other circumstances or conditions related to the establishment of the additional Buona Restaurant, prevent or restrict you from operating the additional Buona Restaurant or restrict or prevent us from offering you the rights set forth in this Paragraph, we shall have no obligation to offer you the right to establish or operate the additional Buona Restaurant.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Buona is not obligated to offer the developer the right to establish or operate an additional Buona Restaurant if certain conditions prevent or restrict them from doing so. Specifically, if bona fide arrangements or agreements with a third party, lease restrictions for the proposed premises, or other circumstances related to the establishment of the additional Buona Restaurant prevent or restrict the developer from operating the additional Buona Restaurant, Buona is not obligated to offer the right to establish or operate it. This means that factors outside of the developer's control, such as existing agreements Buona has with other parties or limitations on the property where the restaurant would be located, can override the developer's right of first refusal.
This clause protects Buona's flexibility in making business decisions and managing its relationships with other entities. For a prospective developer, this means that even with a right of first refusal, there's no guarantee they will be able to open additional locations in their development area. The developer's expansion plans could be thwarted by unforeseen circumstances or pre-existing agreements that Buona has in place.
It is important for a prospective Buona developer to understand these limitations and to inquire about any potential restrictions or existing agreements that could impact their ability to expand within their development area. This due diligence can help the developer assess the risks and opportunities associated with the development agreement and make informed decisions about their investment.