Can Beard Papas use the Brand Development Fund to compensate themselves for administrative fees?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
d upon all franchisees. (Franchise Agreement, Article 9.A.).
We may use the Brand Development Fund to compensate ourselves for administrative fees associated with managing the Brand Development Fund and for our internal employee salaries, expenses and overhead associated with or reasonably allocated to managing the activities of the Brand Development Fund and performing services on behalf of the Brand Development Fund including, but not limited to, directing,
developing and managing media of the Brand Development Fund. We will not use the Brand Development Fund to directly market the sale of Shops, but may do so indirectly by requiring and including information as to the availability of Shop franchises for sale and contact information for franchise inquiries on and within advertising, marketing and brand development materials, including the System website, developed with the Brand Development Funds.
During the fiscal year ending December 31, 2024, we have collected $146,725.17 towards the Brand Development Fund. Of the $146,725.17
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas can use the Brand Development Fund to cover administrative fees. The document states that the Brand Development Fund can be used to compensate Beard Papas for administrative fees associated with managing the fund, as well as for internal employee salaries, expenses, and overhead related to managing the fund's activities.
This means that a portion of the money franchisees contribute to the Brand Development Fund may be used to pay for Beard Papas's corporate overhead. While this is a fairly common practice in franchising, prospective franchisees should understand how the fund is being used and what percentage is allocated to administrative costs versus direct marketing efforts.
The FDD also indicates that during 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. While this shows where the money was spent in the past, it does not guarantee that future funds will be allocated in the same way. Franchisees are entitled to an unaudited accounting of how the Brand Development Fund is spent each year, but can only request this once within a 12-month period. This provides some transparency, but franchisees have limited control over how the funds are used.