In California, what specific pre-opening obligations must Buona complete before collecting initial fees from franchisees?

According to Buona's 2025 Franchise Disclosure Document, the collection of initial fees from California franchisees is deferred until Buona has completed all pre-opening obligations and the franchisee is open for business. This condition is imposed because the Department has determined that Buona has not demonstrated adequate capitalization or that it relies on franchise fees to fund its operations. For California franchisees who sign a development agreement, the payment of development and initial fees attributable to a specific unit in the development schedule is deferred until that unit is open.

This means that prospective Buona franchisees in California will not be required to pay any initial fees until their restaurant is fully operational. This arrangement reduces the upfront financial burden on the franchisee and aligns Buona's interests with the franchisee's success, as Buona only receives the initial fees once the franchisee is generating revenue.

This deferral of fees is a significant benefit for California franchisees, as it lowers the initial investment required to start a Buona franchise. It also provides some assurance that Buona is committed to supporting the franchisee through the pre-opening phase, as they are not paid until the restaurant is ready to open. Franchisees should confirm with Buona exactly what constitutes completion of "all of our pre-opening obligations" to ensure clarity on when the fees become due.