What were the total advertising costs for Buona for the year ended December 29, 2024?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
r will establish, maintain and administer an advertising, marketing and promotional fund (the "Marketing Fund") for such advertising, marketing and promotions as Franchisor may deem necessary or appropriate in its sole discretion. Franchisee shall contribute to each of the Marketing Funds an amount Franchisor designates up to a total of two and one-half percent (2.5%) of the Gross Sales (as defined below) of the Franchised Business arising from the sale of Buona products and services and up to a total of three percent (3%) of the Gross Sales of the Franchised Business arising from the sale of The Original Rainbow Cone products and services. Franchisor shall determine whether Franchisee will make one payment to Franchisor that will be distributed to each Marketing Fund based on the Gross Sales of the respective Brands or whether Franchisee shall make separate payments to each Marketing Fund. Franchisor will give Franchisee sixty (60) days' notice prior to implementing any increase or decrease in the Marketing Fund contribution. Franchisor has right to discontinue or reestablish the Marketing Fund upon sixty (60) days' advance notice to you. In the event
Franchisor discontinues the Marketing Fund, Franchisor will distribute all unspent amounts existing in the Marketing Fund on the date of discontinuance to franchisees in proportion to their respective contributions for the most recent six (6) months. This Marketing Fund contribution is due weekly (or on such other basis as may be set forth in the Manuals or otherwise agreed to in writing by Franchisor) along with the royalty fee for the Gross Sales for the preceding week. A further description of the Marketing Fund and your obligations with respect to advertising, marketing and promoting the Franchised Business is set forth in Article XI of this Agreement. Marketing Fund contributions shall be paid in the manner set forth in Section 3.5 of this Agreement or as otherwise provided in the Manuals.
- 3.4 Technology Fee. Franchisee shall pay to Franchisor a technology fee in an amount determined by Franchisor. Franchisor has the right to determine how and for what purposes the technology fees will be used, which may include covering Franchisor's costs or paying fees to third party providers for technology development, maintenance, and usage for the franchise system, and subscription and license fees paid by Franchisor in order for franchisees to have access to and use certain technology tools, and for related research and development conducted by Franchisor. The technology fee shall be paid at times, in the manner, and in amounts as designated by the Franchisor. Franchisor will give Franchisee at least sixty (60) days' prior notice before Franchisor begins changing the amount of the technology fee.
- 3.5 Late Payment Charge. If any monetary obligations owed by Franchisee to Franchisor or to its Affiliates are more than seven (7) days overdue, Franchisee shall, in addition to any other obligations, pay to Franchisor a sum equal to one and one-half percent (1.5%) of the overdue balance per month, or the highest rate permitted by law, whichever is less, from the date said payment is due ("Late Payment Charge").
- 3.6 Pre-Authorized Payment Methods.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
Based on the 2025 FDD, the document does not explicitly state the total advertising costs incurred by Buona for the year ending December 29, 2024. However, it does provide information regarding the franchisee's obligations related to marketing and advertising.
Specifically, Buona franchisees are required to contribute to marketing funds. The amount is determined by Buona, up to 2.5% of gross sales for Buona products and services, and up to 3% of gross sales for The Original Rainbow Cone products and services. Buona will provide 60 days' notice before any changes to these contribution percentages. Buona also has the right to discontinue or reestablish the Marketing Fund with 60 days' notice, and any unspent funds will be distributed to franchisees based on their contributions over the previous six months.
In addition to contributing to the Marketing Fund, franchisees must spend a minimum of 1% of their gross sales on local advertising, marketing, and promotion to promote both the Buona and The Original Rainbow Cone brands. These local advertising expenditures are made directly by the franchisee but are subject to Buona's approval and direction. Franchisees must also provide an accounting of these local advertising expenditures to Buona upon request. Furthermore, franchisees are required to spend a minimum of $25,000 on advertising and marketing during the grand opening period, which spans from 60 days before opening through the first 90 days of operation. These grand opening funds are to be used on advertising mediums agreed upon by both Buona and the franchisee.
To gain a clearer understanding of Buona's total advertising costs, a prospective franchisee should ask the franchisor for specific figures related to the Marketing Fund's total revenue and expenditures for the year ended December 29, 2024. This would provide a more comprehensive view of the advertising efforts undertaken by the franchisor on behalf of the franchise system.