Does Angry Chickz have the right to commingle Brand Fees with general operating funds?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
Nothing in this Agreement shall be deemed to create a trust fund, a fiduciary relationship or similar relationship, and Company may commingle Brand Fees with its general operating funds and expend such sums in the manner provided.
Company and its Affiliates are not obligated to spend or contribute or allocate to the Brand Fund any amounts.
- 8.3.5 If less than the total of all contributions and allocations to the Brand Fund are expended during any fiscal year, such excess may be accumulated for use during subsequent years.
Company may spend in any fiscal year an amount greater or less than the aggregate contributions to the Brand Fund in that year and
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, Angry Chickz has the right to commingle Brand Fees with its general operating funds. Specifically, the franchise agreement states that nothing within the agreement should be interpreted as creating a trust fund or fiduciary relationship. This allows Angry Chickz to combine Brand Fees with their other operational funds and spend them as they see fit.
This practice is relatively common in franchising, as it gives the franchisor greater flexibility in managing its finances. However, it also means that the Brand Fees are not necessarily held in a separate, protected account. While the Brand Fund will be accounted for separately, this does not limit Angry Chickz's right to commingle Brand Fees with general operating funds.
For a prospective franchisee, this means that the Brand Fees they pay are not necessarily earmarked solely for advertising and marketing purposes, although the Brand Fund may be used to pay all administrative and other costs related to its activities and purposes. While Angry Chickz is not required to provide franchisees with an accounting of how the funds were spent, an annual unaudited summary of contributions to, and expenditures of, the Brand Fund will be made available to the franchisee within a reasonable period of time after a written request. It would be prudent for a potential Angry Chickz franchisee to inquire about the typical allocation of Brand Fund expenditures to understand how their fees will be utilized.