Are the royalty payments refundable for a Buona franchise?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.2 Royalty.
Franchisee shall pay recurring, non-refundable royalties as follows: (i) to Chicago's Original Italian Beef Franchising LLC, a royalty in the amount of four percent (4%) of Gross Sales (as defined herein) derived from the sale of Buona products and services; and (ii) to Five Flavors Franchising, LLC, a royalty in the amount of six percent (6%) of Gross Sales derived from the sale of The Original Rainbow Cone products and services.
The royalties shall be paid throughout the Term, and are payable weekly (or on such other basis as may be set forth in the Manuals or otherwise agreed to in writing by Franchisor) calculated on Gross Sales of the preceding week.
Royalty fees shall be paid in the manner set forth in Section 3.5 of this Agreement or as otherwise provided for in the Manuals.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the royalty fees franchisees pay are non-refundable. The franchisee must pay recurring royalties to Chicago's Original Italian Beef Franchising LLC, which is 4% of Gross Sales derived from Buona products and services. Additionally, the franchisee pays a royalty of 6% of Gross Sales to Five Flavors Franchising, LLC for sales of The Original Rainbow Cone products and services.
These royalty fees are paid throughout the term of the agreement. They are calculated on Gross Sales of the preceding week and are payable weekly, or on another basis as outlined in the manuals or agreed to in writing with Buona.
Because the royalty fees are non-refundable, a prospective Buona franchisee should carefully consider projected gross sales and ensure they fully understand the payment schedule and obligations before signing the franchise agreement. This non-refundable policy is a standard practice in franchising, as these fees compensate Buona for the ongoing use of its brand, systems, and support.