In the context of Buona's Franchisee Obligations table, what does 'ADA' stand for?

According to Buona's 2025 Franchise Disclosure Document, within the Franchisee's Obligations table, the abbreviation "ADA" refers to an Area Development Agreement. This is important for prospective franchisees to understand because the table outlines the franchisee's responsibilities under both the standard Franchise Agreement and any Area Development Agreement they may enter into.

An Area Development Agreement with Buona grants the franchisee the rights to open multiple locations within a specific market area, according to a development schedule outlined in the agreement. These agreements typically involve paying an area development fee, which is treated as deferred revenue by Buona until franchise agreements are executed for the new locations or the execution date in the ADA passes.

If new franchise agreements are signed within the development schedule's terms, the ADA fees are amortized over the course of the new franchise agreement. However, if the deadline passes without the franchisee opening the agreed-upon number of locations, Buona recognizes the ADA fees as non-refundable revenue. Therefore, understanding the obligations and timelines associated with an Area Development Agreement is crucial for franchisees planning to expand their Buona business.