Can the Brand Development Fund for Bang Cookies invest surplus funds?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
The Brand Development Fund is not required to expend Brand Development Fund Fees in the year that they are collected and the Brand Development Fund may borrow from Franchisor or other lenders at standard commercial interest rates to cover deficits of the Brand Development Fund, and Franchisor may cause the Brand Development Fund to invest any surplus for future use by the Brand Development Fund.
All interest earned on monies contributed to the Brand Development Fund will be used to pay costs of the Brand Development Fund before other assets of the Brand Development Fund are expended.
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 has the ability to invest surplus funds for future use. Specifically, Bang Cookies may direct the Brand Development Fund to invest any surplus it accumulates.
This means that if the Brand Development Fund has more money than it immediately needs for advertising, marketing, and other related activities, Bang Cookies can choose to invest the excess funds. The returns from these investments would then be available for the Brand Development Fund to use in the future.
Furthermore, any interest earned on the monies contributed to the Brand Development Fund will be used to cover the fund's costs before any other assets are used. This clause ensures that investment income is prioritized for covering the fund's operational expenses, potentially maximizing the impact of franchisee contributions.