Can Angry Chickz compensate itself or its affiliates for internal expenses related to the operation of its marketing/advertising department and the administration of the Brand Fund?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
8.3.3 Without limiting the foregoing, Company may do any of the following:
(a) employ individuals, consultants or advertising or other agencies, including consultants or agencies owned by, operated by Company or its Affiliates, to provide services for the Brand Fund;
(b) compensate Company and/or its Affiliates for internal expenses, including salaries, overhead and administrative expenses incurred in connection with the operation of its marketing/advertising department(s), and the administration of the Brand Fund, and to otherwise compensate Company and/or its Affiliates for expenses related to the operation of the Brand Fund;
(c) pay for or charge the Brand Fund for attorneys' fees and other costs related in any way to claims against Company, any of its Affiliates, and/or the Brand Fund regarding or in connection with the Brand Fund.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, Angry Chickz has the authority to compensate itself and its affiliates for internal expenses. Specifically, Angry Chickz can use the Brand Fund to cover salaries, overhead, and administrative costs related to operating its marketing and advertising departments, as well as managing the Brand Fund itself.
This means that a portion of the Brand Fees paid by Angry Chickz franchisees may be used to reimburse Angry Chickz for its internal costs associated with marketing and advertising activities. This is a common practice in franchising, as the franchisor typically manages the Brand Fund and incurs expenses in doing so.
Prospective Angry Chickz franchisees should be aware that the Brand Fund is not solely dedicated to external advertising campaigns but can also be used to cover Angry Chickz's internal operational expenses. While this arrangement is permissible, franchisees might want to inquire about the specific allocation of Brand Fund expenditures to understand how much is being used for internal compensation versus direct advertising and marketing efforts.