How is the total Development Fee for Buona franchises calculated?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
-------------|--------------------| | FRANCHISOR INITIALS | DEVELOPER INITIALS |
Development Schedule. If you are not in compliance with the Development Schedule at the time of signing any additional franchise agreement, you will pay the then-current initial franchise fee being charged to new franchisees if it is greater than Thirty-Two Thousand Dollars ($32,000.00).
2.2 Upon the execution of this Development Agreement, you shall pay a fee ("Development Fee") in the amount of Sixteen Thousand Dollars ($16,000.00) times the number of additional Buona Restaurants to be developed after the one for which Developer is signing a Franchise Agreement contemporaneously with this Development Agreement. The Development Fee is consideration for this Development Agreement, is fully earned by Franchisor upon execution of this Development Ag
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the Development Fee is $16,000.00 times the number of additional Buona Restaurants to be developed after the one for which the developer is signing a Franchise Agreement contemporaneously with the Development Agreement. This fee compensates Buona for granting the Development Agreement and is earned fully upon the agreement's execution, being non-refundable.
However, Buona will credit $16,000.00 of the Development Fee against the Initial Franchise Fee for each additional Franchise Agreement for a Buona Restaurant executed pursuant to, and in accordance with, the Development Agreement. This means that while the Development Fee is initially paid upfront, it essentially acts as a pre-payment towards the initial franchise fees of subsequent locations developed under the agreement.
For a prospective Buona franchisee, this means that expanding beyond the initial restaurant involves paying a Development Fee upfront, but this fee is then applied as a credit towards future franchise fees. This structure incentivizes the developer to open additional locations as planned, since the initial investment in the Development Fee is recouped over time as new franchises are established. It's important to note that the Development Fee is non-refundable, so careful planning and adherence to the development schedule are crucial to maximize the return on this investment.