What is the condition for Baya Bar to administer the marketing fund?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
You are required to contribute 1% of your Gross Sales weekly to our System, Baya Bar Shops and the products and services offered by Baya Bar Shops. (Franchise Agreement, Section 8.3.) Each Baya Bar outlet operated by our affiliates or us may, but is not obligated to, contribute to the Marketing Fund on the same basis as System franchisees. All franchisees will contribute the same percentage to the Fund.
The Marketing Fund is administered by our owner William Loesch. We may use Marketing Fund contributions to pay any and all costs for developing, producing and disseminating advertising, marketing, promotional and public relations materials, programs, campaigns, sales and marketing seminars and training programs of every kind and nature, through any media we determine; conducting marketing research and employing advertising agencies; developing, enhancing and maintaining our website, social media platforms, apps, and other technology for the benefit of the Marketing Fund image and/or Systemwide
improvements; and staff salaries and other personnel and departmental costs for advertising that we internally administer or prepare.
The Marketing Fund will not be used to defray any of our other general operating expenses. Marketing Fund contributions will not be used to solicit new franchise sales; provided however, we have the right to use the Marketing Fund for public relations, to explain the franchise system, and/or include "Franchises Available" or similar language and contact information in advertising produced with Marketing Fund contributions.
The Marketing Fund collects and expends contributions for the benefit of the System as a whole. We have the right to use the Marketing Fund contributions to place advertising in national, regional or local media (including broadcast, print, or other media) and to conduct marketing campaigns through any channel, in our discretion, including but not limited to, internet and direct-mail campaigns. We have no obligation, however, to use the Brand Fund to place advertising or conduct marketing campaigns in any particular area, including the geographical area where your Franchised Business is located. No amount of the Fund will be spent for advertising that is principally a solicitation for the sale of franchises.
We have no obligation to make expenditures that are equivalent or proportionate to your Marketing Fund contribution or to ensure that you benefit directly or pro rata from the production or placement of advertising from the Brand Fund.
We have the right to reimburse ourselves out of the Fund for the total costs (including indirect costs such as salaries for our employees who devote time and effort to Fund related activities and overhead expenses) of developing, producing and distributing any advertising materials and collecting the marketing fund fee (including attorneys', auditors' and accountants' fees and other expenses incurred in connection with collecting any marketing fund fee). We also have the right to use a portion of the Fund to subsidize the cost of presenting refresher training and/or a franchisee meeting. The Marketing Fund and its earnings shall not otherwise inure to our benefit except that any resulting technology and intellectual property shall be deemed our property."
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–36)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the brand's owner, William Loesch, administers the Marketing Fund. Franchisees are required to contribute 1% of their gross sales weekly to the fund. Baya Bar can use these contributions to cover costs associated with advertising, marketing, promotional materials, public relations, sales and marketing seminars, training programs, marketing research, advertising agencies, website and social media maintenance, app development, technology improvements, and staff salaries related to advertising.
The Marketing Fund will not be used for Baya Bar's general operating expenses or to solicit new franchise sales. However, the brand can use the fund for public relations, explaining the franchise system, and including "Franchises Available" language in advertising. Baya Bar has the right to use the Marketing Fund contributions to place advertising in national, regional, or local media and to conduct marketing campaigns through any channel.
Baya Bar is not obligated to make expenditures equivalent to a franchisee's contribution or ensure direct benefits for each franchisee. They can reimburse themselves from the fund for costs related to developing and distributing advertising materials and collecting the marketing fund fee, including salaries, overhead, and legal fees. A portion of the fund can also subsidize refresher training or franchisee meetings. Any technology and intellectual property resulting from the Marketing Fund will be owned by Baya Bar.