What benefit do the affiliate-owned Buona restaurants have regarding food and product costs?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Food and product costs for all existing affiliate-owned restaurants have been negotiated by our affiliates with manufacturers and distributors on a consolidated basis and have the benefit of volume costs for units all located within one region. New franchisees in new markets may not have the volume to negotiate favorable prices with manufacturers and distributors serving the franchisee's region which would result in higher costs for these products.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–75)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the affiliate-owned restaurants benefit from negotiated food and product costs due to their consolidated purchasing power. Because the affiliate-owned restaurants are all located within one region, Buona's affiliates have negotiated with manufacturers and distributors on a consolidated basis, securing volume discounts.
This arrangement gives the affiliate-owned restaurants a potential cost advantage compared to new Buona franchisees. The FDD notes that franchisees establishing a unit in a new market may lack the necessary volume to negotiate favorable prices with manufacturers and distributors in their region, which could result in higher costs for food and products.
Prospective franchisees should consider this difference in purchasing power when evaluating the financial performance data of the affiliate-owned restaurants. The lower food and product costs enjoyed by the affiliate-owned restaurants may not be achievable for a new franchisee, especially in the initial phase of the business or in a market where Buona does not yet have a strong presence. This could impact the franchisee's profitability and overall financial performance.