Does the Bee Organized franchisee have any control over how the Brand Development Fund is spent?
Bee_Organized Franchise · 2025 FDDAnswer from 2025 FDD Document
Fund will be applicable for each and every monthly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and method set forth in Article 5.B. for the payment of Royalty Fees or as otherwise designated by Franchisor;
- (3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation thereof. Without limiting the foregoing, the Brand Development Fund may also be utilized for evaluation and monitoring of the Business Management Systems, maintenance and upgrades to the System Website, and development of Digital Media;
- (4) Franchisee agrees that the purpose of the advertising, media, marketing and activities financed by the Brand Development Fund is and shall be for the general enhancement of the System brand as associated with the Licensed Marks and general public brand recognition and awareness of the Licensed Marks. The Brand Development Fund will not be utilized to directly or indirectly market or promote the Franchised Business or, unless otherwise directed by Franchisor, in Franchisor's Reasonable Business Judgment, pay for media placements that may benefit or include any media market that includes Franchisee's Administrative Office or Operating Territory;
- (5) Franchisee agrees that the Brand Development Fund may be used to pay various costs and expenses of Franchisor for such reasonable salaries, wages, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration, activities and/or the brand awareness goals of the Brand Development Fund including expenses incurred by Franchisor for advertising, advertising
councils, marketing, product and service testing, product and service development, maintenance, evaluation and monitoring of the Business Management Systems, upgrades to the System Website, development of Digital Media and creative development that is internally administered or prepared by Franchisor and other marketing activities made by Franchisor, provided, however, that salary expenses for Franchisor's personnel paid by the Brand Development Fund shall be commensurate with the amount of that time spent by such personnel on Brand Development Fund matters. Franchisor shall not use contributions to the Brand Development Fund to defray any of Franchisor's general operating expenses, except for such reasonable salaries, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration and activities of the Brand Development Fund and creation or conduct of its marketing programs including, without limitation, conducting market research, preparing advertising and marketing materials and collecting and accounting for contributions to the Brand Development Fund. Franchisor may spend in a fiscal year an amount greater or less than the aggregate contributions of all Bee Organized Businesses to the Brand Development Fund in that year;
Source: Item 23 — RECEIPTS (FDD pages 54–218)
What This Means (2025 FDD)
According to Bee Organized's 2025 Franchise Disclosure Document, the franchisee has very limited control over the Brand Development Fund. The franchisor, in its reasonable business judgment, has sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, as well as the geographic, market, and media placement and allocation thereof. The fund's purpose is for the general enhancement of the System brand and public recognition of the Licensed Marks, not to directly market the franchisee's specific business, unless the franchisor directs otherwise.
Bee Organized franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Development Fund. The franchisor is not obligated to ensure that expenditures in any geographic area are proportionate to the contributions from Bee Organized businesses operating in that area, nor that any business will directly benefit in proportion to its contribution. The franchisor can use the Brand Development Fund to promote any type of Bee Organized business or those located within a particular region of the United States.
The franchisee's obligation to contribute to the Brand Development Fund is not reduced or eliminated if they fail to derive any benefit from it, or if other franchisees fail to make appropriate contributions. The Brand Development Fund is not a trust, and the franchisor is not a trustee or fiduciary of the fund. The franchisor may deposit funds in its general accounts and is not required to segregate them. A summary statement of monies collected and costs incurred by the Brand Development Fund for the franchisor's preceding fiscal year will be made available to the franchisee upon written request.
In summary, while franchisees contribute to the Brand Development Fund, Bee Organized retains full control over its administration and use, with the goal of enhancing the overall brand rather than guaranteeing direct benefits to individual franchisees. Franchisees are obligated to participate in programs instituted by the fund and are not entitled to a reduction in their contributions even if they do not perceive a direct benefit.