What is the dependency for B Bops to start developing and producing advertising campaigns?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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, the company's obligation to develop advertising campaigns is contingent upon franchisees paying the advertising fee. B Bops reserves the right to waive this fee, and currently plans to do so until the income from franchise sales is sufficient to finance advertising and promotional campaigns. During any period that B Bops waives the advertising fee, they are not obligated to develop or produce advertising for franchisees. However, franchisees are still required to observe independent advertising expenditures.
B Bops collects a monthly advertising fee equal to three percent (3%) of the gross sales of your Franchise. The company may use these fees to develop advertising, promotional, and public relations campaigns to promote the B-Bop's Restaurant system. However, franchisees are responsible for paying the cost of implementing such advertising as part of the independent advertising expenditure requirement.
It's important to note that there are no assurances that B Bops will sell a sufficient number of franchises to commence operation of the advertising fund. This means that franchisees may need to rely on their own independent advertising efforts to promote their locations, even while paying the advertising fee if the waiver is revoked. Prospective franchisees should inquire about B Bops's specific plans for advertising and the criteria they will use to determine when to start collecting the advertising fee.