What is the Beard Papas franchisee's obligation regarding 'Advertising Contributions' as outlined in the franchise agreement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
op advertising and marketing materials and programs, Franchisor undertakes no obligation to ensure that expenditures by the Brand Development Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Brand Development Fund by Beard Papa's Shops operating in that geographic area or that any Beard Papa's Shops will benefit directly or in
proportion to its contribution to the Brand Development Fund from the development of advertising and marketing materials. Franchisor may use the Brand Development Fund to promote or benefit any type of Beard Papa's Shops in the System. Franchisor may use the Brand Development Fund to promote or benefit Beard Papa's Shops located within a particular region of the United States. Franchisee agrees that Franchisee's failure to derive any such benefit will not serve as a basis for a reduction or elimination of its obligation to contribute to the Brand Development Fund. Franchisee agrees that the failure (whether with or without Franchisor's permission) of any other franchisee to make the appropriate amount of contributions to the Brand Development Fund shall not in any way release Franchisee from or reduce Franchisee's obligations under this Article 9, such obligations being separate and independent obligations of Franchisee under this Agreement. Except as expressly provided in this Article 9, Franchisor assumes no direct or indirect liability, responsibility, or obligation to Franchisee with respect to the maintenance, direction, and/or administration of the Brand Development Fund; and
(10) Franchisor, in Franchisor's Reasonable Business Judgment, may establish a council to provide guidance respecting the administration of the Brand Development Fund and marketing matters concerning the Brand Development Fund. The council shall only serve in an advisory capacity and Franchisor shall select members of the council which may be comprised of employees of Franchisor, Franchisor, franchisees of the System and third-parties.
**9.B.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to the 2025 Beard Papas Franchise Disclosure Document, the franchisee is obligated to contribute to the Brand Development Fund, with the funds used to develop advertising and marketing materials. Beard Papas has the discretion to use these funds to promote any type of Beard Papa's shop within the system, including those in a specific region of the United States. The franchisee's obligation to contribute remains, regardless of whether they directly benefit from the advertising and marketing efforts.
The agreement specifies that the failure of other franchisees to contribute to the Brand Development Fund does not relieve any individual franchisee of their obligation. Each franchisee's contribution is considered a separate and independent obligation. Beard Papas assumes no direct or indirect liability or responsibility to the franchisee regarding the management and administration of the Brand Development Fund, except as expressly provided in the franchise agreement.
Beard Papas may establish a council to advise on the administration of the Brand Development Fund and related marketing matters. This council serves only in an advisory capacity, and its members may include Beard Papas employees, franchisees, and third parties. This structure ensures that Beard Papas retains ultimate control over the fund's management and marketing strategies, while potentially incorporating franchisee input through the advisory council.
In the event of a transfer of the franchise, the franchisee remains liable for all obligations to Beard Papas, including advertising contributions, until the transfer is fully compliant with the agreement. After an approved transfer, the franchisee is no longer obligated to pay advertising contributions that accrue following the transfer date. This condition highlights the importance of adhering to the transfer requirements outlined in the franchise agreement to avoid continued financial obligations.