Does the FDD state that the operations of the affiliate-owned Buona unit differ materially from a new franchised Buona Business?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
4 through December 29, 2024.
The length of time the 10 restaurants have been in operation as of December 31, 2023 ranged from 12 years to 3 years, 7 months.
The operations of the 10 affiliate-owned units included in 3 tables below do not differ materially from those of a new franchised Buona Business that is a free standing location with a drive through window except that the affiliate-owned units sell pizza, and the new franchised Buona Businesses will not sell pizza. Information is provided below on what percentage of total sales of the affiliate-owned units was derived from the sale of pizza products.
If you will be establishing an inline location without a drive through window, you should not rely on these numbers and should review the data below regarding our one affiliate-owned unit that is an inline location.
The 3 tables below show the Gross Sales and certain specified expenses as listed and defined below of the
10 Buona affiliate-owned restaurants included in this statement. This does not include all expenses incurred by a Buona restaurant.
The source of this data is income statements for each individual restaurant prepared internally by our affiliates consistent with generally accepted accounting principles.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–75)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the operations of affiliate-owned units generally do not differ materially from those of a new franchised Buona Business, with one key exception. For free-standing locations with drive-throughs, both single-brand and dual-brand (Buona and The Original Rainbow Cone), the affiliate-owned units sell pizza, while new franchised Buona businesses will not. The FDD provides information on the percentage of total sales derived from pizza sales in these affiliate-owned units. This difference is highlighted to ensure prospective franchisees understand that the financial performance of affiliate locations includes revenue from pizza, which they will not have.
For inline locations without a drive-through window, the FDD states that the operations of the affiliate-owned unit do not differ materially from those of a new franchised Buona Business established in a similar inline shopping center location. This suggests that the core business model and operational aspects are consistent between affiliate-owned and franchised inline locations. However, the document cautions that if a franchisee is establishing an inline location, they should not rely on the financial data from free-standing locations with drive-throughs and should instead review the data regarding the one affiliate-owned inline unit.
Buona emphasizes that the historical results presented are from affiliate-owned restaurants located in the Chicago metropolitan area, where the Buona brand has been established for 40 years and The Original Rainbow Cone brand for over 90 years. Franchisees establishing a unit in a new market without brand recognition may not perform as well, especially in the initial phase of the new business. Additionally, the affiliate-owned restaurants benefit from volume-based cost negotiations with manufacturers and distributors, which new franchisees in new markets may not be able to replicate, potentially resulting in higher food and product costs. Therefore, while the operations are similar, franchisees need to consider these market-specific factors when evaluating the potential performance of their franchise.