How does the initial franchise fee for a Buona franchise in Item 5 relate to the franchisee's obligations as outlined in Item 9?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Franchise Agreement | Disclosure Document Item | |
|---|---|---|---|
| a. | Site selection and acquisition/lease | Sections 1.1, 6.2, 6.3 9.2(b), and 16.2(a) Exhibit A | Item 11 |
| b. | Pre-opening purchases/leases | Sections 6.3 and 10.3 | Items 5 and 7 |
| c. | Site development and other pre-opening | Sections 1.1, 5.5, 6.1 – | Items 5, 6, 7, 8 and |
| requirements | 6.4, 8.2, and 8.3 | 11 | |
| d. | Initial and ongoing training | Article VIII | Item 11 |
| e. | Opening | Section 6.5 and 16.2(a) | Items 8 and 11 |
| f. | Fees | Sections 2.2, Article III, 4.7, 6.6, 8.2, 8.3, 8.4, 8.5, 8.6, 9.7, 10.3, 12.3, 15.3, 15.4 16.6, 16.9 and 24.11 ADA – Sec. 2 | Items 5 and 6 |
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Item 5 details the initial fees required to be paid by the franchisee, while Item 9 outlines the franchisee's obligations. Item 9 references Item 5, indicating a direct relationship between the initial fees and the franchisee's responsibilities.
Specifically, under Item 9, obligation 'b' refers to pre-opening purchases/leases, citing Sections 6.3 and 10.3 of the Franchise Agreement and referencing Items 5 and 7 of the FDD. This means that the initial fees described in Item 5 are directly related to the franchisee's obligation to make necessary pre-opening purchases or leases. Similarly, obligation 'c' regarding site development and other pre-opening requirements also references Item 5, along with Items 6, 7, 8, and 11, indicating that initial fees are tied to the franchisee's duties in preparing the site for opening. Furthermore, obligation 'f' concerning fees references Item 5, indicating that the franchisee's obligation to pay various fees is detailed within Item 5.
In practical terms, this means a prospective Buona franchisee should carefully review Item 5 to understand all the initial fees they must pay, as these payments are a fundamental obligation for opening and operating the franchise. These fees include, but are not limited to, the initial franchise fee, on-site training fee deposit, and costs associated with initial purchases of products and services. Understanding these obligations is crucial, as failure to meet them could result in a breach of the Franchise Agreement.