What is the purpose of the special fund created by B Bops for advertising fees?
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.
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, if the company decides to collect advertising fees from franchisees, these fees will be deposited into a special fund. This fund will be managed by B Bops to finance the creation and production of advertising for the B Bops Restaurant system. The advertising developed will then be made available to franchisees for dissemination at their own expense.
B Bops will make all decisions regarding the advertising content, concepts, materials, and media. The FDD anticipates that advertising will be developed for radio, television, and print media. Since franchisees are responsible for the costs of disseminating the advertising, the coverage will likely be local to directly benefit their franchise. B Bops Restaurants owned by the company will also contribute to the advertising fund at the same rate as franchisees.
The FDD specifies that B Bops does not plan to use any portion of the advertising fees to solicit new franchise sales. While an annual audit of the fund is not planned, B Bops anticipates providing franchisees with an annual report detailing the fund's receipts and expenditures. The company also states that it is not anticipated that B Bops or any affiliate will receive payment for providing goods or services to the advertising fund. B Bops has not established an advertising council of franchisees to advise on advertising policies, nor has it established any local or regional advertising cooperatives that franchisees are required to participate in.