What is the development fee for each single brand Buona restaurant to be developed?
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, a development fee of $16,000 is required for each additional single-brand Buona restaurant to be developed after the first restaurant. This fee is paid upon the execution of the Development Agreement.
The Development Fee serves as consideration for the Development Agreement and is fully earned by Buona upon the agreement's execution. This fee is non-refundable, regardless of any conflicting provisions in the Franchise Agreement. However, Buona will credit $16,000 of the development fee against the initial franchise fee for each additional Buona Restaurant, provided the Franchise Agreement is executed according to the Development Agreement.
In the franchise industry, development fees are commonly used when a franchisee commits to opening multiple locations. This fee compensates the franchisor for granting the franchisee exclusive development rights within a specific area and timeframe. The crediting of the development fee towards the initial franchise fee is a fairly standard practice, reducing the overall financial burden on the franchisee as they expand.