How does the Development Fee paid to Buona apply to the Initial Franchise Fee for each additional restaurant?
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, a Development Fee is required when a developer signs a Development Agreement for additional Buona restaurants beyond the first one. This fee is $16,000 multiplied by the number of additional restaurants to be developed.
While the Development Fee is non-refundable and considered fully earned by Buona upon execution of the Development Agreement, $16,000 of the Development Fee is credited towards the Initial Franchise Fee for each additional Buona Restaurant, provided the Franchise Agreement is executed according to the Development Agreement.
For the initial Buona Restaurant, the franchise fee is $40,000. The franchise fee for each additional restaurant is $32,000, assuming the developer is in compliance with the Development Schedule. If the developer fails to comply with the Development Schedule when signing additional franchise agreements, they will be required to pay the then-current full initial franchise fee for new franchisees if it is greater than $32,000.