Can Beauty Bungalows waive the Local Area Marketing requirement entirely?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | 5.5% of Gross Revenue or a minimum royalty of $250 per week, whichever is greater. | Monthly, on the first Tuesday of each month | Your Royalty Fee will begin once your Beauty Bungalows Franchise is open for business. "Gross Revenue" is defined in Note (2) below this table. |
| Brand Fund Contribution ("Brand Fund") | Currently 1% of Gross Revenue per month. May be increased to a maximum of 2% of Gross Revenue. | Monthly, on the first Tuesday of each month | We may implement or change the contribution amount to the Brand Fund upon thirty (30) days' written notice. All franchisees will be required to contribute the same amounts to the Brand Fund; however the Company Owned Outlets may not contribute to the Brand Fund in the same amounts as our franchisees. |
| Local Area Marketing Requirement | Up to 2% of Gross Revenue. May be reduced to 0% based on your occupancy levels. | Monthly, on the first Tuesday of each month | In addition to the Brand Fund Contribution, you must spend a minimum of 2% per month on local advertising and promotion implemented in a format and using materials and designs approved by us. We may reduce, or waive entirely, the Local Area Marketing Requirement if you reach 75% or greater suite occupancy for available suites at your Beauty Bungalows franchise. If we establish a Marketing Cooperative (described in Note 8 below) then your contributions to any Marketing Cooperative shall count toward your Local Area Marketing Requirement. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Beauty Bungalows' 2025 Franchise Disclosure Document, the Local Area Marketing Requirement, which can be up to 2% of Gross Revenue, may be reduced to 0% under certain conditions. Specifically, Beauty Bungalows may waive the Local Area Marketing Requirement entirely if a franchisee reaches 75% or greater suite occupancy for available suites at their Beauty Bungalows franchise.
This waiver is a significant potential benefit for franchisees who can achieve high occupancy rates. By reaching the 75% occupancy threshold, a franchisee could reallocate the funds that would have been spent on local marketing to other areas of the business, such as improving services or increasing profitability. This provides a direct financial incentive to focus on maximizing suite occupancy.
It is important to note that the initial requirement is up to 2% of Gross Revenue, meaning Beauty Bungalows has the discretion to set the initial requirement at a lower percentage. Additionally, if Beauty Bungalows establishes a Marketing Cooperative, contributions to that cooperative count toward the Local Area Marketing Requirement, providing an alternative way to fulfill the requirement. Franchisees should confirm with Beauty Bungalows the current percentage required for local area marketing and the likelihood of a marketing cooperative being established in their area.