Must the designated manager of a Buona franchise have an equity interest in the Franchisee entity?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
rmation as confidential.
ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
We require that one of your principal owners who has at least a 10% ownership interest in Franchisee will have supervisory responsibility over the Franchises Business. Your principal owner or one designated management employee who has attended and successfully completed our training program must devote full time energy and best efforts to the development, promotion, management and operation of the Franchised Business. The designated manager need not have any equity interest in the Franchisee entity.
If at any time you propose that the Franchised Business to be operated or managed by an entity or individual other than Franchisee, we reserve the right to review and approve the operating or managing entity or individual and to require and approve an operating or management agreement prior to such party's assumption of operations.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 51–52)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the designated manager of a Buona franchise is not required to have any equity interest in the franchisee entity. Buona requires that one of the principal owners with at least a 10% ownership interest in the franchisee have supervisory responsibility over the franchised business.
However, the principal owner can designate a management employee to manage and operate the franchised business. This designated manager must attend and successfully complete Buona's training program and devote full-time energy and best efforts to the development, promotion, management, and operation of the franchised business.
For franchisees with an Area Development Agreement, multiple managers are permitted for each Buona business. Buona recommends that a designated manager devote substantial full-time efforts on a daily basis to supervise and conduct the Buona business, and this manager must also complete the training program. Again, the designated manager is not required to have an ownership interest in the franchisee entity.