To whom does the Bang Cookies franchisee pay the Brand Development Fund Fee?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
(1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each weekly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Sales of the Franchised Business for each weekly Accounting Period;
(2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund.
Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every weekly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing.
The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees;
- (3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation thereof.
Without limiting the foregoing, the Brand Development Fund may also be utilized for evaluation and monitoring of the Business Management Systems, maintenance and upgrades to the System Website, and development of Digital Media;
- (4) Franchisee agrees that the purpose of the advertising, media, marketing and activities financed by the Brand Development Fund is and shall be for the general enhancement of the System brand as associated with the Licensed Marks and general public brand recognition and awareness of the Licensed Marks.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the Brand Development Fund Fee is paid directly to the Franchisor. This fee, if instituted by Bang Cookies, is a mandatory and ongoing payment calculated as a percentage of the franchisee's Gross Sales for each weekly accounting period. Bang Cookies specifies that franchisees will not be required to contribute more than 2% of their Gross Sales for each weekly accounting period.
The FDD states that Bang Cookies will provide written notice to the franchisee regarding the specific percentage of Gross Sales required for the Brand Development Fund Fee. This percentage will remain applicable for each weekly accounting period throughout the term of the franchise agreement unless Bang Cookies designates otherwise in writing. The Brand Development Fund Fee is due on a specific date and must be paid according to the payment terms and methods outlined in Article 5.B, which also governs the payment of Royalty Fees.
Bang Cookies retains significant control over the Brand Development Fund, including directing all advertising, media placement, marketing, and public relations programs financed by the fund. They have sole discretion over the strategic direction, creative concepts, materials, endorsements, and the geographic, market, and media placement and allocation of these resources. The fund may also be used for evaluating and monitoring Business Management Systems, maintaining and upgrading the System Website, and developing Digital Media. The purpose of these activities is to enhance the Bang Cookies brand and increase public recognition of the Licensed Marks.