For Beard Papas, what happens if the Brand Development Fund has a deficit?

According to Beard Papas's 2025 Franchise Disclosure Document, the Brand Development Fund is not required to expend its fees in the year they are collected. To cover deficits, the Brand Development Fund may borrow from Beard Papas or other lenders at standard commercial interest rates. Beard Papas also has the option to invest any surplus funds for future use by the Brand Development Fund.

This means that if the Brand Development Fund runs into a shortfall, Beard Papas has the flexibility to manage the situation by borrowing funds to cover the deficit. This ensures that planned advertising and marketing activities can continue without interruption. The ability to borrow at commercial interest rates suggests that the fund will need to be managed responsibly to ensure it can repay any debts incurred.

For a prospective Beard Papas franchisee, this indicates that the Brand Development Fund is designed to be financially stable and sustainable. The ability to borrow funds and invest surpluses provides a buffer against fluctuations in income and expenses. However, franchisees should be aware that the Brand Development Fund is not a trust and Beard Papas is not a fiduciary, meaning Beard Papas has significant discretion in managing the fund.