What is the definition of 'Brand Fund Contribution' for a Baya Bar franchise?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
13.3.1 Franchisor has established a national Brand Fund (the "Brand Fund") on behalf of the System for national advertising and marketing. Franchisee is required to contribute an amount equal to one percent (1%) of the Gross Revenue generated weekly by Franchisee's Franchised Business to the Brand Fund ("Brand Fund Contribution"). Franchisor reserves the right, in Franchisor's sole discretion and at any time and from time to time, to increase the amount of the Brand Fund Contribution to any amount not to exceed three percent (3%) of the Gross Revenue. Payments will be made in the same manner and time as the Royalty Fees. If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.3 and 6.4 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable. Franchisor shall reconcile amounts when Gross Revenues are reported.
- 13.3.2 Franchisor shall direct all brand advertising and marketing programs and shall have sole discretion to approve or disapprove the creative concepts, materials and media used in such programs and the placement and allocation thereof.
Franchisee agrees and acknowledges that the Brand Fund is intended to maximize general public recognition and acceptance of the Marks and enhance the collective success of all Franchised Businesses operating under the System.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the Brand Fund Contribution is defined as the amount each franchisee is required to contribute to the national Brand Fund for advertising and marketing. The standard contribution is one percent (1%) of the Gross Revenue generated weekly by the franchisee's Baya Bar location. These payments are made in the same manner and time as the royalty fees.
Baya Bar retains the right to increase the Brand Fund Contribution up to a maximum of three percent (3%) of Gross Revenue at any time, at their sole discretion. If a franchisee fails to report Gross Revenue on time, Baya Bar can collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable, in addition to late fees and interest. However, Baya Bar will reconcile these amounts once the Gross Revenues are accurately reported.
The Brand Fund is intended to maximize public recognition of the Baya Bar brand and enhance the success of all franchised businesses within the system. Baya Bar has sole discretion over all brand advertising and marketing programs, including the approval of creative concepts, materials, and media used in these programs.