Do the affiliate-owned Buona restaurants included in Item 19 pay royalties or other ongoing fees?

According to Buona's 2025 Franchise Disclosure Document, the affiliate-owned restaurants included in Item 19 do not pay royalties or other ongoing fees that a franchisee would be required to pay under the Franchise Agreement. However, the financial performance representations in Item 19 impute these fees to provide a more accurate comparison for prospective franchisees. This means that while the reported revenue and expenses of the affiliate-owned restaurants do not reflect actual royalty payments, the Item 19 statements calculate what those payments would have been.

This is an important consideration for potential Buona franchisees because the historical financial data presented for affiliate-owned restaurants is adjusted to reflect expenses that franchisees will incur. By imputing royalty and other fees, Buona aims to provide a more realistic picture of the potential financial performance of a franchised location. This adjustment helps franchisees better understand the costs associated with operating a Buona franchise and make informed decisions about their investment.

It is also important to note that the affiliate-owned restaurants benefit from negotiated food and product costs due to volume purchasing power within a single region, and have the advantage of 40 years of brand recognition in their market. New franchisees in new markets may not have these advantages, which could impact their financial performance. Therefore, while the imputed fees provide a more accurate representation of potential franchisee expenses, other factors could influence the actual financial results.