What is the total development fee for Buona franchises paid upon execution of the agreement?
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, a Development Fee is required upon the execution of the Development Agreement. This fee is calculated by multiplying $16,000 by the number of additional Buona restaurants the developer plans to open, beyond the one for which they are simultaneously signing a Franchise Agreement. This fee compensates Buona for granting the development rights.
While the Development Fee is non-refundable, Buona will credit $16,000 of the Development Fee towards the Initial Franchise Fee for each additional Buona Restaurant, provided the franchisee adheres to the Development Schedule. This credit effectively reduces the initial franchise fee for subsequent locations.
It's important to note that compliance with the Development Schedule is crucial. If the developer fails to meet the schedule when signing additional franchise agreements, they will be required to pay the then-current initial franchise fee, which could be higher than $32,000. This highlights the importance of carefully planning and executing the development schedule to maximize the value of the Development Agreement and avoid additional costs.