What happens to the Brand Fund if Baya Bar terminates it?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.3.7 Although the Brand Fund is intended to be of perpetual duration, Franchisor may terminate it at any time and for any reason or no reason.
Franchisor will not terminate the Brand Fund, however, until all monies in the Brand Fund have been spent for advertising or promotional purposes or returned to contributors, without interest, on the basis of their respective contributions.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to the 2024 Baya Bar Franchise Disclosure Document, Baya Bar may terminate the Brand Fund at any time and for any reason. However, Baya Bar will not terminate the Brand Fund until all the money in it has been spent for advertising or promotional purposes. Alternatively, the funds can be returned to the contributors, without interest, based on their respective contributions.
This means that if Baya Bar decides to end the Brand Fund, franchisees can expect either the continued use of the funds for marketing and advertising to benefit the Baya Bar system or a return of their contributions. The FDD specifies that the Brand Fund is intended to be of perpetual duration, but this clause protects franchisees in the event that Baya Bar chooses to discontinue it.
It is important for prospective franchisees to understand that while the Brand Fund contributions are meant to enhance the Baya Bar brand, there is no guarantee that a franchisee will directly benefit from the advertising expenditures. However, in the event of termination, the remaining funds will be used for the benefit of the franchise system or returned to the franchisees.