Is Bang Cookies required to segregate the Brand Development Fund?

According to Bang Cookies's 2024 Franchise Disclosure Document, Bang Cookies is not required to segregate the Brand Development Fund from its general operating funds. This means that the money collected for the Brand Development Fund can be mixed with the company's other revenue streams. Bang Cookies also states that it is not a fiduciary or trustee of the Brand Development Fund.

This arrangement gives Bang Cookies significant flexibility in managing the Brand Development Fund. While the FDD states the Brand Development Fund will maintain unaudited financial records detailing its expenditures and will make available to franchisees an unaudited accounting of how monies contributed to the Brand Development Fund were spent each year, franchisees may have less direct control or oversight compared to situations where funds are segregated and managed by a trustee.

It is important for prospective Bang Cookies franchisees to understand that Bang Cookies has broad discretion over how the Brand Development Fund is used. While the funds are intended for purposes such as marketing, advertising, and technology development to benefit the Bang Cookies system, the lack of segregation and fiduciary responsibility means franchisees have less assurance that the funds will be used in a way that directly benefits their individual shops. Franchisees should consider this when evaluating the overall value and potential return on investment of a Bang Cookies franchise.