Is the Beard Papas Brand Development Fund Fee paid to the Franchisor directly?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each monthly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than 2% of the Gross Sales of the Franchised Business for each monthly Accounting Period;
- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund. Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every monthly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees;
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, franchisees are required to pay the Brand Development Fund Fee directly to Beard Papas. This fee is a mandatory, ongoing payment calculated as a percentage of the franchise's Gross Sales, although it will not exceed 2% of Gross Sales for each monthly accounting period. Beard Papas will provide written notice to the franchisee specifying the exact percentage of Gross Sales required for the Brand Development Fund Fee. This percentage will remain consistent for each monthly accounting period throughout the term of the agreement unless Beard Papas provides a revised written notice.
The Brand Development Fund is used at the discretion of Beard Papas for advertising, media placement, marketing, and public relations programs. This includes determining the strategic direction, creative content, materials, endorsements, and the geographic, market, and media placement. The fund may also cover the evaluation and monitoring of business management systems, website maintenance and upgrades, and the development of digital media.
While the Brand Development Fund aims to enhance the overall Beard Papas brand and increase public recognition, it may not directly benefit each franchise location equally. Franchisees are still obligated to contribute to the fund, even if they do not perceive a direct benefit in their specific area. Additionally, Beard Papas has the right to manage the fund's assets and is not obligated to segregate these funds from its other accounts. This arrangement means that Beard Papas has significant control over how the Brand Development Fund is used, and franchisees have limited influence over these decisions.