What happens to the monies in the Baya Bar Brand Fund if the Franchisor 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 Baya Bar's 2024 Franchise Disclosure Document, the Brand Fund is intended to be of perpetual duration. However, Baya Bar retains the right to terminate the Brand Fund at any time, for any reason, or for no reason at all.
If Baya Bar does decide to terminate the Brand Fund, the FDD stipulates that the Brand Fund will not be terminated until all the money in it has been spent. The monies must be used for advertising or promotional purposes, or they must be returned to the contributors. The contributions will be returned without interest and on the basis of their respective contributions.
This clause protects franchisees by ensuring that advertising fees already paid into the Brand Fund are used appropriately, even if the fund is discontinued. Prospective franchisees should consider the implications of the Brand Fund's potential termination and how it might affect marketing and advertising support for their Baya Bar franchise.