What is the franchisee's responsibility regarding advertising materials developed by B Bops?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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. The Company will thereafter be responsible for developing and producing advertising materials to be made available to you and other franchisees for dissemination at your own expense as part of the independent advertising expenditure requirement. All decisions regarding the content, concepts, materials and media utilized in such advertising will be made by the Company in its sole discretion. It is currently anticipated that advertising will be developed for dissemination over radio and television and through print. Since you will be responsible for the expense of disseminating the advertising (including all
media, printing and mailing expenses), the coverage of the advertising presumably will be local in nature to directly benefit your Franchise. It is anticipated that the B-Bop's Restaurants owned by B-Bop's will also be required to contribute to the advertising fund on the same basis and at the same rate as you and the other franchisees. Your contributions to the fund will be on the same basis and at the same rate as all other franchisees currently acquiring a Franchise from the Company. It is not contemplated that the fund will be audited on an annual basis, although the Company does anticipate that an annual report concerning receipts and expenditures by the fund will be provided to you and all other franchisees. It is not currently anticipated that the Company or any affiliate will receive any payment for providing goods or services to the advertising fund. No decisions have been made by the Company concerning the party or parties who will be responsible for developing and producing the advertising.
If and when the Company determines to invoice payment of the advertising fee by you and the other franchisees, the Company will not use any portion of those fees to solicit new franchise sales.
The Company has not established an advertising council of franchisees that advises the Company on advertising policies. The Company also has not established any local or regional advertising cooperative in which you and other franchisees are required to participate.
Independent Advertising Expenditures. As noted in Item 6 of this disclosure document, you will be required to spend a minimum of two percent (2%) of the gross sales of your Franchise for independent advertising during each quarter. This requirement remains in effect even though the Company has waived payment of your fees to the advertising fund and is not providing advertising materials for your use. You may satisfy the independent advertising requirement by implementing advertising and promotional campaigns provided by the Company (during those periods when the Company is required to provide such advertising) or you may create and implement advertising of your own, provided any advertising which you have developed has been submitted to and approved by the Company prior to its use. The Company will advise you within a reasonable period (usually 30 days) whether the proposed advertising materials are acceptable. The Company reserves the right to require you to submit an independent advertising report (along with supporting invoices) at such times as the Company may direct.
Electronic Cash Register System. You will be required to purchase an electronic cash register system which will be used to record all sales of food and beverage items by the Franchise. Currently, the cash register system that you are required to purchase is a Hewlett Packard ALOHA system. The Hewlett Packard ALOHA system uses a specific software system that was developed by Hewlett Packard. The software for the Hewlett Packard ALOHA system is available through Retail Data Systems located in Ankeny, Iowa. The cost for acquiring the hardware portion of the Hewlett Packard ALOHA system and obtaining a license to use the Hewlett Packard ALOHA system is approximately $27,000.
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 responsible for the costs associated with implementing advertising campaigns developed by the company. Specifically, franchisees must cover the expenses of disseminating these advertising materials, which includes media, printing, and mailing costs. This means that while B Bops develops the advertising content, the franchisee bears the financial burden of getting that advertising in front of potential customers. The advertising is expected to be local in nature, directly benefiting the franchisee's location.
B Bops collects a monthly advertising fee equal to three percent (3%) of the gross sales of the franchise. However, B Bops retains the right to waive this fee. The company plans to waive the advertising fee until the number of franchises sold provides sufficient income to finance advertising and promotional campaigns. During any period that B Bops has determined to waive payment of the advertising fee, B Bops will not be obligated to develop or produce advertising on behalf of the franchisees. Even if the advertising fee is waived, franchisees are still required to observe the independent advertising expenditure.
B Bops does not use any portion of the advertising fees to solicit new franchise sales. The company has not established an advertising council of franchisees to advise on advertising policies, nor has it established any local or regional advertising cooperative in which franchisees are required to participate. Franchisees should be aware that the effectiveness and reach of advertising campaigns are heavily dependent on their willingness to invest in disseminating the materials provided by B Bops.