Will the Buona Marketing Fund be kept separate from other funds of the Franchisor?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
The Marketing Fund will be a separate and distinct account and will be accounted for separately from the other funds of the Franchisor and will not be used to defray any of Franchisor's general operating expenses, except for any reasonable salaries, administrative costs and overhead Franchisor may incur in activities reasonably related to the administration of the Marketing Fund and its advertising, marketing and promotional programs (including, without limitation, conducting market research, preparing advertising, marketing and promotional materials, and collecting and accounting for contributions to the Marketing Fund). Franchisor may spend in any fiscal year an amount greater or less than the total contribution of Buona Businesses to the Marketing Fund in that year. Franchisor may cause the Marketing Fund to borrow from Franchisor or other lenders to cover deficits of the Marketing Fund or cause the Marketing Fund to invest any surplus for future use by the Marketing Fund. All interest earned on monies contributed to the Marketing Fund will be used to pay advertising, marketing and promotional costs of the Marketing Fund before other assets of the Marketing Fund are expended. Franchisor will prepare an annual statement of monies collected and costs incurred by the Marketing Fund and will furnish it to Franchisee on written request.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Marketing Fund will be maintained as a separate and distinct account, and it will be accounted for separately from Buona's other funds. This means that the money contributed to the Marketing Fund by franchisees will not be mixed with Buona's general operating funds. However, Buona can use the Marketing Fund to cover reasonable salaries, administrative costs, and overhead that Buona incurs while administering the Marketing Fund and its advertising, marketing, and promotional programs.
Buona has the discretion to spend more or less than the total contributions from Buona businesses in any given fiscal year. To cover deficits, Buona may borrow funds or invest any surplus for future use by the Marketing Fund. Any interest earned on the Marketing Fund will be used to pay for advertising, marketing, and promotional costs before using other assets of the fund. This ensures that the fund's earnings are reinvested into marketing efforts.
Buona will provide an annual statement of monies collected and costs incurred by the Marketing Fund to franchisees upon written request. While Buona aims to use the Marketing Fund to develop advertising and marketing materials that benefit all Buona businesses, there is no obligation to ensure that expenditures in any geographic area are proportionate to the contributions from Buona businesses in that area. This means that some franchisees may benefit more or less directly from the Marketing Fund than others, regardless of their contribution. Buona assumes no direct or indirect liability or obligation to franchisees regarding the maintenance, direction, or administration of the Marketing Fund, except as expressly provided in the franchise agreement.