Is the Brand Development Fund for Bang Cookies considered a trust?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
- (8) Franchisee and Franchisor acknowledge and agree that (a) the Brand Development Fund is not a trust, (b) Franchisor is not a trustee or fiduciary of the Brand Development Fund, and (c) Franchisor may deposit and maintain any and all funds of the Brand Development Fund Fee in Franchisor's general accounts.
Brand Development Fund Fees are not required to be segregated from other assets or accounts of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, the Brand Development Fund is explicitly not considered a trust. The agreement specifies that Bang Cookies is not a trustee or fiduciary of the Brand Development Fund. Furthermore, the funds collected for the Brand Development Fund do not need to be kept separate from Bang Cookies's other assets or accounts.
This arrangement gives Bang Cookies significant flexibility in managing the Brand Development Fund. They are not legally obligated to treat the fund as a separate entity held in trust for the benefit of franchisees. This means Bang Cookies has more control over how the money is spent and invested.
For a prospective franchisee, this is an important consideration. While Bang Cookies will provide a summary statement of monies collected and costs incurred by the Brand Development Fund upon written request, franchisees have less direct control or legal recourse regarding how the fund is managed compared to a formal trust structure. Franchisees should carefully evaluate Bang Cookies's history of managing the fund and its strategic priorities for marketing and advertising to ensure they align with their own business goals.