On what basis will B Bops franchisees' contributions to the advertising fund be calculated?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Company Advertising Program. As noted in Item 6 of this disclosure document, you are required under the terms of the Franchise Agreement to pay the Company a monthly advertising fee equal to three percent (3%) of the gross sales of your Franchise. The Company, however, reserves the right to waive payment of all or part of the advertising fee by you and other franchisees for such period as the Company may in its discretion deem appropriate. Any waiver will be communicated to you, in writing, and may be revoked at such time as the Company, in its sole discretion, deems appropriate. Upon revocation of any waiver, you and the other franchisees will be required to commence payment of the advertising fee. The Company currently plans to waive payment of the advertising fee in whole until such time as the number of franchises sold will provide advertising fee income sufficient to finance the development of advertising and promotional campaigns. During any period that the Company has determined to waive payment of the advertising fee in whole, the Company will not be obligated to develop or produce advertising on behalf of you or the other franchisees. You will, however, be required to continue to observe the independent advertising expenditure discussed below. No assurances can be given that the Company will sell a sufficient number of Franchises to commence operation of the advertising fund.
If and when the Company determines to invoke payment of the advertising fee by you and other franchisees, such fees will be deposited by the Company into a special fund to be administered by the Company and used to finance the development and production of advertising for the B-Bop's Restaurant system.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 25–33)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, franchisees are required to pay a monthly advertising fee equal to three percent (3%) of their franchise's gross sales. However, B Bops retains the right to waive this fee for a period they deem appropriate, communicating any waiver in writing, and revoking it at their discretion.
Currently, B Bops plans to waive the advertising fee until the income from franchise sales is sufficient to finance advertising and promotional campaigns. During any period that B Bops has determined to waive payment of the advertising fee in whole, the Company will not be obligated to develop or produce advertising on behalf of you or the other franchisees. However, even if the advertising fee is waived, franchisees are still required to observe the independent advertising expenditure, which is a minimum of two percent (2%) of the gross sales of your Franchise for independent advertising during each quarter.
It's important to note that there are no assurances that B Bops will sell enough franchises to commence operation of the advertising fund. This means that while franchisees may not be paying into the advertising fund initially, they are still obligated to spend a minimum of two percent of gross sales on independent advertising. This could impact a franchisee's initial marketing strategy and budget.