For California franchisees who sign a development agreement with Buona, when is the payment of development and initial fees deferred?

According to Buona's 2025 Franchise Disclosure Document, for California franchisees who sign a development agreement, the payment of development and initial fees attributable to a specific unit in their development schedule is deferred until that specific unit is open for business. This deferral is a condition imposed by the California Commissioner, indicating that Buona must defer collecting initial fees from California franchisees until all pre-opening obligations are completed and the franchise is open.

This condition is due to the Department determining that Buona has not demonstrated adequate capitalization and may rely on franchise fees to fund operations. This means that Buona cannot collect these fees upfront but must wait until the franchisee is actually operating.

For a prospective franchisee in California, this deferral is a significant benefit as it reduces the initial financial burden. Instead of paying the fees before opening, the franchisee can use those funds for other startup costs and only pay the fees once the business is generating revenue. However, it's important to note that this deferral applies specifically to California franchisees due to the regulatory requirements in that state.