How do the required purchases for a Buona franchise in Item 8 relate to the initial franchise fee for a Buona franchise as described in Item 5?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 5: INITIAL FRANCHISE FEE]
ITEM 5 INITIAL FRANCHISE FEE
Initial Franchise Fee
The Initial Franchise Fee for a franchise granting the right to open one Buona Business is $40,000.00. The Initial Franchise Fee is due in full upon your execution of the Franchise Agreement.
The Initial Franchise Fee is non-refundable with one exception. If we terminate your Franchise Agreement for your failure to successfully complete the initial training program, we will refund you 10% of the initial franchise fee paid once you have signed and delivered to us a termination agreement and general release of all claims in a form satisfactory to us.
If you are purchasing a Dual Brand franchise, you will pay us the initial franchise fee above and you will pay Five Flavors the non-refundable initial franchise fee due under its Franchise Disclosure Document. Currently that initial franchise fee is $20,000 for a Rainbow Express franchise.
On-Site Training Fee Deposit
You must pay us an on-site training fee for the on-site assistance that we will provide you at your restaurant location before and around the time of the opening of the Buona Business. When you sign the Franchise Agreement, you must pay a non-refundable on-site training fee deposit in the amount of $20,000. The nonrefundable balance of the on-site training fee will be paid after training is complete and you have opened for business.
Initial Purchases of Products and Services
Before you open your Buona Business, you must purchase from our affiliate Authentic Brands of Chicago, LLC an initial inventory of proprietary food products. The estimated cost of the initial purchase of inventory products ranges from $2,500 to $7,500. Before you open your Buona Business, you may
purchase an initial supply of marketing materials from our affiliate The Buona Companies, L.L.C. or another supplier. If you purchase the initial marketing materials from us, the estimated cost is $100 to $10,000. Payments made for these purchases are non-refundable.
Before you open your Buona Business, you must purchase from our affiliate Keystone Planning + Design, PLLC design and architectural services relating to the build-out of the restaurant premises. The estimated cost is $65,000 to $100,000 for a newly constructed free standing restaurant and $20,000 to $40,000 for an inline restaurant in a leased premises. You must pay them a non-refundable $5,000 deposit upon the execution of the Franchise Agreement. The refundability of other payments is as agreed upon between you and Keystone Planning + Design, PLLC.
Area Development Fee
If you are a Developer, you must sign the Franchise Agreement for your first Buona franchise and pay the initial franchise fee for the first franchise to be developed at the same time as you sign the Area Development Agreement. In addition, you must pay a non-refundable Development Fee when you sign the Area Development Agreement. The Development Fee is one-half of the initial franchise fees that will be due for the additional The Buona Businesses to be developed. The franchise fee for the additional franchises after the first franchise will be discounted by 20%, so the initial franchise fee paid for the additional franchises would be $32,000.
When you sign the Franchise Agreement for the additional franchises, $16,000 of the Development Fee paid will be applied against the initial franchise fee for the franchise, and you will pay the balance due of $16,000.
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, Item 5 details the initial franchise fee and other initial purchases required before opening a Buona Business. The initial franchise fee for a single Buona franchise is $40,000, payable upon execution of the Franchise Agreement. This fee is generally non-refundable, except in the specific instance where Buona terminates the agreement due to the franchisee's failure to complete the initial training program successfully; in that case, 10% of the fee is refunded after a termination agreement and release of claims are signed. For Area Developers, the initial franchise fee for additional franchises after the first is discounted by 20%, resulting in a fee of $32,000.
In addition to the initial franchise fee, franchisees must make several mandatory purchases. They are required to purchase an initial inventory of proprietary food products from Authentic Brands of Chicago, LLC, an affiliate of Buona, with costs ranging from $2,500 to $7,500. Franchisees may also purchase initial marketing materials from The Buona Companies, L.L.C. (another affiliate) or another supplier, with estimated costs between $100 and $10,000. Furthermore, design and architectural services from Keystone Planning + Design, PLLC, another Buona affiliate, are required for restaurant build-out, costing $65,000 to $100,000 for new free-standing restaurants and $20,000 to $40,000 for inline restaurants in leased premises; a non-refundable $5,000 deposit is due upon signing the Franchise Agreement.
These required purchases are separate from the initial franchise fee but are essential for establishing and operating a Buona franchise. The FDD specifies that payments for these purchases, particularly those made to Buona's affiliates, are generally non-refundable, highlighting the importance of careful planning and due diligence before entering into the franchise agreement. The initial franchise fee and the costs of the required purchases represent a significant initial investment for prospective franchisees.