Can the Beard Papas Brand Development Fund borrow money to cover deficits?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Development Fund is not required to expend Brand Development Fund Fees in the year that they are collected and the Brand Development Fund may borrow from Franchisor or other lenders at standard commercial interest rates to cover deficits of the Brand Development Fund, and Franchisor may cause the Brand Development Fund to invest any surplus for future use by the Brand Development Fund.
All interest earned on monies contributed to the Brand Development Fund will be used to pay costs of the Brand Development Fund before other assets of the Brand Development Fund are expended.
A summary statement of monies collected and costs incurred by the Brand Development Fund for Franchisor's immediately preceding fiscal year shall be made available to Franchisee upon Franchisee's written request.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas FDD, the Brand Development Fund can borrow money to cover deficits. Specifically, the Brand Development Fund may borrow from Beard Papas or other lenders at standard commercial interest rates to cover deficits.
This means that if the Brand Development Fund's expenses exceed its income from franchisee contributions, Beard Papas has the option to take out loans to ensure that marketing and advertising efforts can continue uninterrupted. These loans would be obtained at standard commercial interest rates, which would add to the expenses of the fund.
Additionally, Beard Papas may cause the Brand Development Fund to invest any surplus for future use by the Brand Development Fund. All interest earned on monies contributed to the Brand Development Fund will be used to pay costs of the Brand Development Fund before other assets of the Brand Development Fund are expended. A summary statement of monies collected and costs incurred by the Brand Development Fund for Beard Papas's immediately preceding fiscal year shall be made available to Franchisee upon Franchisee's written request.