For Buona, how is the Development Fee credited against the Initial Franchise Fee for additional Franchised Restaurants?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------|--------------------| | FRANCHISOR INITIALS | DEVELOPER INITIALS |
Development Schedule. If you are not in compliance with the Development Schedule at the time of signing any additional franchise agreement, you will pay the then-current initial franchise fee being charged to new franchisees if it is greater than Thirty-Two Thousand Dollars ($32,000.00).
2.2 Upon the execution of this Development Agreement, you shall pay a fee ("Development Fee") in the amount of Sixteen Thousand Dollars ($16,000.00) times the number of additional Buona Restaurants to be developed after the one for which Developer is signing a Franchise Agreement contemporaneously with this Development Agreement. The Development Fee is consideration for this Development Agreement, is fully earned by Franchisor upon execution of this Development Agreement and is non-refundable, notwithstanding any provision to the contrary contained in any Franchise Agreement. However, we will credit Sixteen Thousand Dollars ($16,000.00) of the Development Fee against the Initial Franchise Fee for each additional Franchise Agreement for a Buona Restaurant executed pursuant to, and in accordance with, this Development Agreement.
| | | Pursuant to the above paragraph and the Development Schedule, the Development Fee under this Agreement is Dollars ($).
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, if a developer signs a Development Agreement, they must pay a Development Fee. This fee is calculated by multiplying $16,000 by the number of additional Buona Restaurants the developer plans to open, beyond the first restaurant. This Development Fee compensates Buona for granting the development rights.
Buona will credit $16,000 of the Development Fee against the Initial Franchise Fee for each additional Franchise Agreement. This credit is applied only if the agreements are executed according to the Development Agreement.
However, to receive the discounted initial franchise fee of $32,000 for subsequent franchise agreements, the developer must be in compliance with the Development Schedule at the time of signing any additional franchise agreement. If the developer is not in compliance, they will be required to pay the then-current full initial franchise fee being charged to new franchisees, which could be higher than $32,000.