Under the Bang Cookies agreement, who does the franchisee pay the Brand Development Fund Fee to?
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;
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the franchisee is required to pay the Brand Development Fund Fee to the Franchisor. This fee is a mandatory and continuing payment, calculated as a percentage of Gross Sales, as determined by Bang Cookies. However, the franchisee will not be required to contribute more than 2% of Gross Sales for each weekly accounting period.
Bang Cookies will provide written notice to the franchisee specifying the percentage of Gross Sales required for the Brand Development Fund Fee. This percentage will remain applicable for each weekly accounting period until Bang Cookies designates otherwise in writing. The Brand Development Fund Fee is due on the specified date and must be paid according to the payment terms and methods outlined in Article 5.B, which also applies to Royalty Fees.
This arrangement means that Bang Cookies has control over the Brand Development Fund and its usage. While the fund is intended for enhancing the System brand and promoting public recognition of the Licensed Marks, Bang Cookies has sole discretion over the strategic direction, creative concepts, and media placement of the fund's activities. The fund may also be used for evaluating and monitoring the Business Management Systems, maintaining and upgrading the System Website, and developing Digital Media.