Can the Brand Development Fund for Bang Cookies borrow money to cover deficits?

According to Bang Cookies' 2024 Franchise Disclosure Document, the Brand Development Fund is permitted to borrow money to cover deficits. Specifically, the Brand Development Fund may borrow from Bang Cookies or other lenders at standard commercial interest rates to cover deficits. Bang Cookies may also cause the Brand Development Fund to invest any surplus for future use by the Brand Development Fund.

This means that if the Brand Development Fund's expenses exceed its income from franchisee contributions, Bang Cookies has the option to borrow funds to cover the shortfall. This could be seen as a benefit to franchisees, as it ensures that marketing and development activities can continue even during periods of financial difficulty. However, it also means that the fund could accrue debt, which would need to be repaid from future contributions.

It's important to note that Bang Cookies is not required to segregate Brand Development Fund Fees from other assets or accounts. Additionally, Bang Cookies shops owned by Bang Cookies or its affiliates are not required to pay any Brand Development Fund Fee or contribute to the Brand Development Fund. A summary statement of monies collected and costs incurred by the Brand Development Fund for Bang Cookies's immediately preceding fiscal year shall be made available to Franchisee upon Franchisee's written request.