factual

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

Beard_Papas Franchise · 2025 FDD

Answer 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 Franchise Disclosure Document, the Brand Development Fund is not required to expend its fees in the year they are collected. This means that if there's a surplus in the fund, Beard Papas may choose to save it for future use. The document specifies that Beard Papas can cause the Brand Development Fund to invest any surplus for future use by the Brand Development Fund.

Furthermore, any interest earned on the monies contributed to the Brand Development Fund will be used to pay the fund's costs before any other assets are used. This implies that the interest earned from the surplus will be reinvested into the fund to cover its operational expenses.

This approach provides Beard Papas with flexibility in managing the Brand Development Fund, allowing them to accumulate resources for larger, long-term marketing initiatives or to cover potential future deficits. For a franchisee, this could mean that marketing efforts might be more substantial or sustained over time, as the fund isn't restricted to spending only what it collects in a given year.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.