Is Beard Papas required to segregate the Brand Development Fund from its general operating funds?

According to the 2025 Beard Papas Franchise Disclosure Document, Beard Papas is not required to segregate the Brand Development Fund from its general operating funds. Additionally, Beard Papas is not considered a fiduciary or trustee of the Brand Development Fund. This means that Beard Papas has the discretion to manage the fund without necessarily being legally bound to act in the franchisees' best interests, although they are expected to act in the best interest of the franchisees and the System.

Franchisees contribute a monthly sum not to exceed 2% of monthly Gross Sales to the Brand Development Fund, which Beard Papas may use for various marketing and development purposes, including market studies, advertising, and technology development. While the Brand Development Fund will maintain unaudited financial records detailing its expenditures, franchisees are only entitled to an unaudited accounting of how the monies were spent, and this can occur no more than once in any 12-month period.

For the fiscal year ending December 31, 2024, Beard Papas collected $146,725.17 for the Brand Development Fund and spent 100% of it on social media marketing. Franchisees should be aware that the Brand Development Fund will not be used to directly promote their individual Shop or its specific marketing area. This structure gives Beard Papas significant control over how the fund is used, with limited obligations to segregate the funds or act as a fiduciary, which is a notable point for prospective franchisees to consider.