For Beard Papas, can the Brand Development Fund invest any surplus for future use?
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.
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 invest any surplus for future use. Specifically, Beard Papas is not required to expend Brand Development Fund Fees in the year that they are collected. Beard Papas may also borrow from the Franchisor or other lenders at standard commercial interest rates to cover deficits of 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. This means that any returns from investments of the Brand Development Fund's surplus will first be directed towards covering the fund's expenses.
This arrangement provides Beard Papas with flexibility in managing the Brand Development Fund, allowing it to save for future campaigns or cover shortfalls by borrowing. However, franchisees should be aware that the Brand Development Fund is not a trust and Beard Papas is not a trustee or fiduciary of the Brand Development Fund, and Beard Papas may deposit and maintain any and all funds of the Brand Development Fund Fee in Franchisor's general accounts.