What are the advertising expenditure obligations for a Beggars Pizza franchisee?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
follows:
- 12.1 Grand Opening Advertising. At least forty-five (45) days prior to the opening of the Restaurant, Franchisee must prepare and submit to Franchisor for its approval a grand opening advertising and promotional program in the form and manner prescribed by Franchisor in writing. Franchisee must expend at least Ten Thousand Dollars ($10,000) on such grand opening advertising and promotion within thirty (30) days after the opening of the Restaurant.
- 12.2 Local Advertising and Promotion. During the term of the Agreement, except for the first three calendar months of operation of the Restaurant, Franchisee must expend, on a monthly basis, an amount equal to at least two percent (2%) of Franchisee's Gross Sales from the previous month on local marketing, advertising, and promotion. Notwithstanding the foregoing, Franchisee must expend at least Three Thousand Dollars ($3,000) on local marketing, advertising, and promotion during each of the first three (3) calendar months that the Restaurant is open, with the first month prorated if the Restaurant is open for only a partial month. All local marketing, advertising, and promotion must be conducted in such manner as Franchisor may, in its sole discretion, direct in the Manual or otherwise in writing.
- 12.3 Verification of Advertising Expenditures. Franchisee must submit verification of the expenditures required by Sections 12.1 and 12.2 hereof, along with verification of the addresses to which any hard copy advertisements were delivered, mailed, or directed, to Franchisor in the form and manner prescribed by Franchisor in the Manual or otherwise in writing from time to time.
- 12.4 Brand Fund Fee. During the term of the Agreement, Franchisee must pay to the System's advertising and brand promotion fund (the "Brand Fund") a fee i
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, franchisees have several advertising expenditure obligations. First, they must spend at least $10,000 on grand opening advertising and promotion within 30 days of opening their restaurant. This initial investment is intended to create awareness and attract customers to the new location.
After the initial grand opening period, franchisees must continue to invest in local marketing. Specifically, after the first three calendar months of operation, a franchisee is required to spend at least 2% of the previous month's gross sales on local marketing, advertising, and promotion. During each of the first three calendar months that the Restaurant is open, the franchisee must expend at least $3,000 on local marketing, advertising, and promotion, with the first month prorated if the Restaurant is open for only a partial month. The franchisor has the discretion to direct the manner in which this local advertising and promotion is conducted, as outlined in the manual or in writing.
In addition to local advertising, Beggars Pizza franchisees must also contribute to the Brand Fund. This contribution is equal to 1% of the franchisee's gross sales from the preceding accounting period. These Brand Fund contributions are separate from and in addition to the local advertising expenditures. Franchisees must also provide verification of their advertising expenditures, including addresses where hard copy advertisements were delivered, to Beggars Pizza in a format specified in the manual or in writing.