How are payments to the Brand Fund made 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.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, franchisees are required to contribute to the Brand Fund, which is used for national advertising and marketing. The Brand Fund contribution is initially set at one percent (1%) of the franchise's weekly Gross Revenue. However, Baya Bar retains the right to increase this contribution amount up to a maximum of three percent (3%) of Gross Revenue.
The payments to the Brand Fund are made in the same manner and at the same time as the royalty fees. This likely means that payments are made on a weekly or other regular basis, coinciding with the reporting and payment of royalties.
If a Baya Bar franchisee fails to report Gross Revenue on time, they will be subject to a late fee and interest, as detailed in other sections of the agreement. Additionally, Baya Bar will collect one hundred twenty percent (120%) of the last Brand Fund contribution payable. This overpayment will be reconciled once the franchisee reports their Gross Revenues, ensuring that the correct amount is ultimately paid.