What fees will Buona franchisees be required to pay under the Franchise Agreement that the affiliate-owned restaurants do not?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
The affiliate-owned restaurants do not pay royalties or other ongoing fees to that you will pay to us under the Franchise Agreement. However, as noted in the tables above, we have imputed the fees that a franchisee would be required to pay.
(15) "Tech Fee" represents the $100/week charge that a Franchised Restaurant will currently pay to Chicago's Original Italian Beef Franchising LLC under the Franchise Agreement.
(16) "Local Advertising" represents the minimum percentage of sales (1.0%) that a Franchised Restaurant must spend on local advertising expenses under the Franchise Agreement.
(17) "BUONA Brand Marketing Fund" represents the maximum percentage of BUONA sales (2.5%) that a Franchised Restaurant would pay to Chicago's Original Italian Beef Franchising LLC under the Franchise Agreement.
(18) "BUONA Royalty" represents the percentage of BUONA sales (4.0%) that a Franchised Restaurant will pay to Chicago's Original Italian Beef Franchising LLC as a service royalty under the Franchise Agreement.
(19) "Rainbow Cone Brand Marketing Fund" represents the percentage of sales (3.0%) that a Franchised Restaurant will pay to the Five Flavors Franchising Marketing Fund under the Franchise Agreement.
(20) "Rainbow Cone Royalty" represents the percentage of sales (6.0%) that a Franchised Restaurant will pay to Five Flavors Franchising LLC as a royalty under the Franchise Agreement.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 60–75)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees will be required to pay royalties and other ongoing fees that the affiliate-owned restaurants do not. However, the financial performance representations in the FDD impute these fees to provide a more accurate comparison.
Specifically, franchisees will need to budget for several fees that the affiliate locations avoid. These include a $100 per week tech fee, a local advertising spend of at least 1.0% of sales, a contribution to the BUONA Brand Marketing Fund capped at 2.5% of sales, and a royalty fee of 4.0% of sales paid to Chicago's Original Italian Beef Franchising LLC. If the franchisee operates a dual-brand location, they will also pay 3.0% of sales to the Rainbow Cone Brand Marketing Fund and a 6.0% royalty to Five Flavors Franchising LLC.
These fees are crucial for prospective franchisees to consider when evaluating the potential profitability of a Buona franchise. While the financial performance data includes imputed fees, understanding the specific amounts and how they are calculated is essential for accurate financial planning. Franchisees should carefully review Item 19 of the FDD and consult with financial advisors to assess the impact of these fees on their potential earnings.