Can Angry Chickz use Brand Fund money for system recognition events?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
8.3.1 Franchisee's Brand Fee shall be contributed to the Brand Fund. An amount equal to all Brand Fund revenues and allocations will be expended for national, regional, or local advertising, public relations or promotional campaigns or programs designed to promote and enhance the image, identity or patronage of franchised and Company and Company Affiliate owned Restaurants in the United States and such other regions as Company may designate. These expenditures may include: (a) creative development, production and placement of print and electronic media advertisements, commercials, musical jingles, decals, radio spots, audio advertising, point of purchase materials, direct mail pieces, literature, outdoor advertising, door hangers, and other advertising and promotional materials; (b) creative development, preparation, production and
placement of video, audio and written materials and electronic media, including social media campaigns, (c) purchasing artwork and other components for advertising; (d) media placement and buying, including search engine marketing, search engine optimization, and all associated expenses and fees; (e) administering national, regional and multi-regional marketing and advertising programs; (f) market research, marketing studies and customer satisfaction surveys, including the use of secret shoppers; (g) development, production and acquisition of premium items, giveaways, promotions, contests, public relations events, and charitable or nonprofit events; (h) creative development of visual advertisements and marketing materials, including signage, posters, and graphics; (i) recognition and awards events and programs; (j) system recognition events, including periodic national and regional conventions and meetings; (k) website, extranet and/or Intranet development, implementation and maintenance; (l) development, implementation and maintenance of websites, loyalty programs and/or mobile applications, bookings/reservations, and/or related strategies; (m) retention and payment of advertising and promotional agencies and other outside advisors, including retainers and management fees; (n) public relations and community involvement activities and programs; (o) expenditures for activities conducted for the benefit of co-branding, or other arrangements where products and/or services are offered in conjunction with other marks or through alternative channels of distribution; and (p) expenditures with others joint marketing campaigns, jointly developed advertising and other joint programs.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to Angry Chickz's 2025 Franchise Disclosure Document, the Brand Fund can be used for system recognition events. Specifically, the Brand Fund, which is funded by a percentage of franchisee's gross sales, may be used for expenditures including system recognition events, such as periodic national and regional conventions and meetings. This means that a portion of the money that Angry Chickz franchisees pay into the Brand Fund can be used to fund events that recognize and reward the achievements of franchisees and the overall system.
This is a fairly common practice in franchising, as system-wide recognition events can help to boost morale, encourage best practices, and foster a sense of community among franchisees. These events can provide a valuable opportunity for franchisees to network with one another, learn from industry experts, and celebrate their successes.
However, the FDD also states that Angry Chickz is not required to prepare audited or other financial statements for the Brand Fund, or to provide Franchisee with an accounting of how funds were spent; however, (i) if Company prepares financial statements for the Brand Fund, Company will make the last year's financial statements available to Franchisee within a reasonable period of time after Franchisee's written request; and (ii) an annual unaudited summary of the contributions to, and expenditures of, the Brand Fund for the last year's activity will be made available to Franchisee within a reasonable period of time after Franchisee's written request. This means that while franchisees contribute to the fund, they may not have full transparency into how the funds are being spent, although they can request some financial information.