How are B Bops independent advertising expenditures calculated?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
| Independent advertising expenditures | 2% of gross sales. | During each quarter. | See Item 11 of this disclosure document for a detailed discussion. |
NOTES:
- 1 All fees and other amounts noted in this table are imposed by and payable to the Company, except for the independent advertising expenditure which is imposed by the Company, but payable to local advertising sources. All fees and other amounts payable to the Company are non-refundable.
- 2 "Gross sales" means the aggregate amount of sales of food, beverage and promotional items generated by the Franchise and includes all sales, receipts and revenues in any form and from any and all sources whatsoever, directly or indirectly, received through operation of the Franchise, whether for cash or credit and regardless of collection in the case of credit. "Gross sales" does not include the amount of any sales or other taxes imposed by any governmental authority directly on sales and collected from customers, provided that the amount of such tax is added to the selling price or otherwise absorbed therein and actually paid to such governmental authority.
Source: Item 6 — OTHER FEES (FDD pages 14–18)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, franchisees are required to make independent advertising expenditures. These expenditures are calculated as 2% of gross sales and are payable during each quarter. Gross sales include all sales of food, beverage, and promotional items, whether for cash or credit, but exclude sales taxes collected from customers and remitted to governmental authorities. Item 11 of the FDD provides a more detailed discussion of these advertising expenditures.
This means that a B Bops franchisee must budget 2% of their total revenue from sales to be spent on local advertising initiatives. This money is not paid to B Bops itself but is instead directed towards local advertising sources. The payments are due quarterly, requiring franchisees to manage their cash flow to meet these obligations.
Prospective franchisees should carefully review Item 11 of the B Bops FDD to understand the specific requirements and guidelines for these independent advertising expenditures. Understanding what types of advertising qualify and how these funds can be spent is crucial for effective local marketing and compliance with the franchise agreement.