For Buona, is the Development Fee refundable, and what does it cover?
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 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, the Development Fee is consideration for the Development Agreement, and Buona earns it fully upon the execution of the Development Agreement.
The Development Fee is calculated as Sixteen Thousand Dollars ($16,000.00) times the number of additional Buona Restaurants to be developed after the one for which the developer is signing a Franchise Agreement contemporaneously with the Development Agreement. Although the Development Fee is non-refundable, $16,000 of the Development Fee will be credited against the Initial Franchise Fee for each additional Franchise Agreement for a Buona Restaurant executed pursuant to, and in accordance with, the Development Agreement.
This means that while you won't get the Development Fee back in cash, it effectively reduces the initial franchise fee for each subsequent Buona restaurant you open under the Development Agreement. This is a fairly standard practice in multi-unit franchise agreements, as it incentivizes developers to fulfill their development schedules. However, if a developer fails to open the agreed-upon number of restaurants, they will not receive a refund for the remaining balance of the development fee.