Is the Development Fee paid upon execution of the Buona Development Agreement refundable?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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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 Ag
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Development Fee is generally non-refundable. Specifically, upon signing the Development Agreement, the developer must pay $16,000 multiplied by the number of additional Buona restaurants they plan to develop, beyond the one for which they are simultaneously signing a Franchise Agreement. This fee compensates Buona for granting the development rights.
Despite being non-refundable, the FDD states that $16,000 of the Development Fee will be credited towards the Initial Franchise Fee for each additional Buona restaurant, provided the franchisee adheres to the Development Agreement's terms. This credit effectively reduces the upfront cost of each subsequent franchise.
It's important for prospective Buona franchisees to understand that while the Development Fee is non-refundable, it functions more like a deposit that is later applied to the Initial Franchise Fees of subsequent locations. Failing to meet the development schedule outlined in the Development Agreement could result in the loss of the credit towards the Initial Franchise Fee, increasing the overall investment required.