Under what condition is the initial franchise fee for a Buona franchise non-refundable?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
tial term of this Agreement but before the execution of a renewal Franchise Agreement as required by Section 2.2, then the temporary continuation of the Franchised Business will be on a month-to-month basis, and will be terminable at Franchisor's option by giving Franchisee written notice of termination at least thirty (30) days before the termination is effective. If the laws of the jurisdiction in which the Franchisee or the Franchised Business are located require a longer notice period, the thirty-day period will be deemed modified to be the shortest notice period required by the laws of such jurisd
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, the initial franchise fee of $40,000 is generally non-refundable. This fee is paid in a single lump sum when the Franchise Agreement is executed. Buona considers this fee fully earned upon payment, acknowledging the expenses they incur in granting the franchise and the opportunity cost of not granting it to someone else.
However, the FDD does state an exception related to Section 8.2, although the details of this exception are not provided in the excerpt. Section 8.2 may outline specific circumstances where a refund of the initial franchise fee could be possible.
Prospective Buona franchisees should carefully review Section 8.2 of the Franchise Agreement to fully understand any potential conditions under which a refund of the initial franchise fee might be granted. It is crucial to clarify these conditions with Buona before signing the agreement, as the initial franchise fee represents a significant upfront investment.