How should Bang Cookies franchisees pay the Brand Development Fund Fee?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
chisor is not required to conduct any marketing on behalf of Franchisee or the System.
9.A. BRAND DEVELOPMENT FUND
At all times during the Term of this Agreement, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, Franchisor may institute, implement, maintain, delegate and administer a brand development fund (the "Brand Development Fund"). The following shall apply to the Brand Development Fund at all times throughout the Term:
- (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, if Bang Cookies institutes a Brand Development Fund, franchisees must pay a mandatory and continuing fee, known as the "Brand Development Fund Fee," on the Due Date. This fee is a percentage of Gross Sales, determined by Bang Cookies, but will not exceed 2% of Gross Sales for each weekly Accounting Period. Franchisees will receive written notice specifying the percentage of Gross Sales required for the Brand Development Fund Fee, which will remain applicable for each weekly Accounting Period until Bang Cookies provides a new written designation.
The Brand Development Fund Fee is paid to Bang Cookies on the Due Date, following the payment terms and method outlined in Article 5.B for Royalty Fees. Bang Cookies has the discretion to direct all advertising, media placement, marketing, and public relations programs financed by the Brand Development Fund. This includes strategic direction, creative concepts, materials, endorsements, and geographic, market, and media placement.
It's important to note that the Brand Development Fund will generally enhance the System brand and public recognition of the Licensed Marks. The fund will not directly market or promote individual franchised businesses unless Bang Cookies directs otherwise. Bang Cookies Shops owned by Bang Cookies or its affiliates are not required to pay the Brand Development Fund Fee.