When does the B Bops franchisee's obligation to pay the advertising fee begin?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. Advertising Fee. Franchisee agrees to pay Company an advertising fee equal to three percent (3%) of gross sales (as defined in Section 9(D) below) generated by the Franchise during each calendar month, beginning with the calendar month in which the Franchise opens for business and continuing for each subsequent calendar month during the Term hereof. Such fee shall be used by Company solely for development of advertising and promotional campaigns, which advertising and promotional campaigns shall be made available to Franchisee for implementation at its own expense in accordance with Section 10(D) hereof. Payments required under this Section shall be made together with the royalty and service fee payment and shall also be made to Company no later than twenty (20) days following the completion of the calendar month for which the advertising fee is being paid. Company may, in its sole discretion, elect to waive payment of all or a portion of the advertising fee provided for in this Section 9(C) for such period of time as Company may deem appropriate. Any such waiver may be revoked at such time as Company in its sole discretion may deem appropriate and Franchisee agrees to thereafter comply with this Section 9(C) in all respects. During any period of waiver of the entire fee, Company shall not be obligated to develop advertising and promotional campaigns for use by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, the franchisee's obligation to pay the advertising fee begins in the same calendar month that the franchise opens for business. The advertising fee is equal to three percent (3%) of the franchise's gross sales. This payment obligation continues for each subsequent calendar month during the term of the franchise agreement.
The advertising fee is used by B Bops for the development of advertising and promotional campaigns. These campaigns are then made available to the franchisee for implementation at their own expense, according to Section 10(D) of the franchise agreement. The franchisee is required to make these advertising fee payments to B Bops no later than twenty (20) days following the completion of the calendar month for which the fee is being paid. This payment is made together with the royalty and service fee payment.
B Bops retains the discretion to waive the advertising fee, either in whole or in part, for a period of time that they deem appropriate. If B Bops waives the entire advertising fee, they are not obligated to develop advertising and promotional campaigns for the franchisee's use during the waiver period. However, B Bops can revoke this waiver at any time, and the franchisee must then resume paying the advertising fee according to the terms of the agreement.
This advertising fee structure is fairly standard in the franchise industry, where franchisees contribute a percentage of their gross sales to a collective advertising fund managed by the franchisor. This allows for coordinated marketing efforts to promote the brand and benefit all franchisees. Prospective B Bops franchisees should consider this ongoing expense when evaluating the financial viability of the franchise.