When is the monthly contribution to the Brand Fund due for a Beauty Bungalows franchise?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
You must contribute to the Brand Fund ("Fund") in an amount we designate (currently 1% of Gross Revenue), which contribution amount will not exceed 2% of your Gross Revenue. Your combined total of contributions to the Fund and any required expenditures in connection with a MAM Program will not exceed 2% of your Gross Revenue in any given month. Your monthly contribution to the Fund is due at the same time and manner as the Royalty Fee. We may, but are not required to, hold contributions to the Fund in a separate bank account. The Fund will be administered by Beauty Bungalows' marketing and accounting staff. All company-owned and affiliate-owned Beauty Bungalows will be required to contribute to the Fund on the same basis as franchisees. We will spend the contributions to the Fund in our discretion. We have no fiduciary duty to you regarding the Fund or your contributions to the Fund. We have no obligation to make expenditures for franchisees in their area or territory or that are equivalent or proportionate to any individual franchisee's contribution to the Fund or ensure that any particular franchisee benefits directly or pro rata from the placement of advertising or deployment of marketing purchased with money from the Fund. If the Fund operates at a deficit or require additional funds at any time, we reserve the right to loan such funds to the Fund on any terms we determine. We are not required to use all contributions collected for the Fund in a given year, and we may retain the amount to spend on the Fund in future years. An unaudited annual financial statement of the Fund will be prepared within 120 days of the close of our fiscal year and will be available to any Franchisee upon written request.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, the monthly contribution to the Brand Fund is due at the same time and manner as the Royalty Fee. The contribution amount is currently designated as 1% of Gross Revenue, but it will not exceed 2% of Gross Revenue. The combined total of contributions to the Brand Fund and any required expenditures in connection with a Multi-Area Marketing Program will not exceed 2% of the franchisee's Gross Revenue in any given month.
Beauty Bungalows may use the Brand Fund to maximize public recognition and acceptance of the brand, increase business, and enhance the collective success of all salons operating under the system. The franchisor will administer contributions to the Brand Fund in its sole determination for the creation and development of marketing, advertising, promotions, and related programs and materials, including electronic, print, and internet media, as well as the planning and purchasing of national, regional, and/or local advertising.
Beauty Bungalows does not have a fiduciary duty to franchisees regarding the Brand Fund or their contributions. The franchisor is not obligated to make expenditures for franchisees in their area or territory or ensure that any particular franchisee benefits directly or pro rata from the placement of advertising or deployment of marketing purchased with money from the Fund. An unaudited annual financial statement of the Fund will be prepared within 120 days of the close of Beauty Bungalows's fiscal year and will be available to any franchisee upon written request.
Prospective franchisees should inquire about the typical due date for Royalty Fees to understand when their Brand Fund contributions will also be due. Understanding the specific timing of these payments is crucial for managing cash flow and ensuring compliance with the franchise agreement.