Is there currently a Brand Development Fund Fee charged to Bang Cookies franchisees?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
that you provide to customers.
Note 4: Brand Development Fund – The brand development fund fee is a continuing weekly fee equal to an amount of up to 2% of your weekly Gross Sales (the "Brand Development Fund Fee"). Currently we do not charge a Brand Development Fund Fee but reserve the right to implement one at any time in the future.
Note 5: Local Marketing – On an on-going calendar year quarterly basis, you must spend not less than 2% of your quarterly Gross Sales on the local marketing of your Shop within your designated territory and in accordance with our standards and specifications.
Note 6: Technology Fee – The continuing monthly technology fee is an administrative fee and is not associated with any particular service but is used, at our discretion, to defray some of our costs related to system website and intranet (the "Technology Fee"). Currently the monthly Technology Fee is $200 per month.
Note 7: Local and Regional Advertising Cooperatives – If two or more Shops are operating within a geographic area, region, or market designated by us (a "designated market"), we reserve the right to establish and require your participation in a local or regional advertising cooperative within the designated market. If a local or regional advertising cooperative is established within a designated market that includes your Shop(s), you will be required to participate in the cooperative and make on-going payments to the cooperative in such amounts and subject to such caps as established by the cooperative members. We anticipate that each Shop franchisee will have one vote for each Shop located within the cooperative market and that cooperative decisions shall be made based on approval of a simple majority vote with a quorum of not less than 25% of the designated cooperative members. Contributions to a local or regional cooperative that we designate will count toward satisfaction of your minimum local marketing requirements.
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, there is currently no Brand Development Fund Fee. However, Bang Cookies retains the right to implement this fee in the future. If implemented, the Brand Development Fund Fee would be a continuing weekly fee, set at up to 2% of the franchisee's weekly Gross Sales. Gross Sales include the total dollar sales from all business and customers of your Shop and includes the total gross amount of revenues and sales from whatever source derived. Gross Sales do not include (a) sales taxes that you collect and remit to the proper taxing authority, and (b) authorized promotional discounts that you provide to customers.
Even without a Brand Development Fund Fee, Bang Cookies franchisees are required to spend a minimum amount on local marketing. Specifically, franchisees must spend no less than 2% of their quarterly Gross Sales on local marketing for their Shop, conducted within their designated territory and according to Bang Cookies's standards and specifications.
The Brand Development Fund is a common practice in franchising, used to support the brand's overall marketing efforts. While Bang Cookies does not currently charge this fee, the fact that they reserve the right to implement it means that prospective franchisees should be prepared for this potential expense. It is important to factor this potential cost into financial projections and to understand how the funds would be used to benefit the franchise system.