When are payments for royalties and fees generally due to Buona?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Royalties and franchisee contributions to national marketing funds are calculated as a percentage of franchise gross sales subject to fees over the term of the franchise agreement. Under the franchise agreement, marketing contributions paid by franchisees must be spent on advertising, marketing, and promotions. Initial and successor franchise fees are payable by the franchisee upon signing a new franchise agreement or successor franchise agreement, and transfer fees are paid to the Company when one franchisee transfers a franchise agreement to a different franchisee. Franchise royalties, as well as marketing fund contributions, represent sales-based royalties that are related entirely to the performance obligation under the franchise agreement and are recognized as franchise sales occur. Payments for royalties are fees are generally due within seven days of the prior week end date.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, royalty and marketing fund contribution payments are generally due within seven days of the prior week end date.
Specifically, Buona franchisees must pay recurring royalties. For sales of Buona products and services, the royalty is 4% of gross sales. For sales of The Original Rainbow Cone products and services, the royalty is 6% of gross sales. These royalties are non-refundable and payable weekly, based on the gross sales of the preceding week. The method of payment for royalty fees is detailed in Section 3.5 of the Franchise Agreement or as specified in the manuals.
In addition to royalties, Buona franchisees must contribute to the Marketing Fund. The contribution amount is up to 2.5% of gross sales from Buona products and services and up to 3% of gross sales from The Original Rainbow Cone products and services. These contributions are also due weekly, along with the royalty fee for the preceding week. The specific payment method is outlined in Section 3.5 of the Franchise Agreement or as provided in the manuals.
Understanding the due dates and methods for royalty and marketing fund contribution payments is crucial for prospective Buona franchisees to manage their cash flow effectively and maintain compliance with the franchise agreement.