What item in the Buona Franchise Disclosure Document is amended regarding the initial franchise fee in the California addendum?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Item 5 of the Franchise Disclosure Document on Initial Franchise Fee is amended by the addition of the following:
- The Department has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Item 5 regarding the Initial Franchise Fee is amended by an addendum for the state of California. This amendment addresses the franchisor's capitalization and reliance on franchise fees.
Specifically, the California Department of Financial Protection and Innovation has determined that Buona has not adequately demonstrated that it is sufficiently capitalized and/or that it does not rely on franchise fees to fund its operations. As a result, the Commissioner has imposed a fee deferral condition.
This condition mandates that Buona must defer the collection of all initial franchise fees from California franchisees until all pre-opening obligations are completed and the franchisee is open for business. For California franchisees who sign a development agreement, the payment of development and initial fees attributable to a specific unit in the development schedule is deferred until that unit is open.