What advertising expenditures are Beggars Pizza franchisees required to make?
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 Beggars Pizza's 2025 Franchise Disclosure Document, franchisees have several mandatory advertising expenditures. First, they must spend at least $10,000 on grand opening advertising and promotion within 30 days of opening their restaurant.
After the initial grand opening period, for the first three calendar months of operation, franchisees must spend a minimum of $3,000 per month on local marketing, advertising, and promotion. If the restaurant is only open for a portion of the first month, this amount is prorated accordingly. After the first three months, the required local advertising expenditure shifts to a percentage-based model. Franchisees are then required to spend at least 2% of their previous month's gross sales on local marketing, advertising, and promotion.
In addition to these local advertising requirements, 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 distributed, in a format specified by Beggars Pizza.
These advertising requirements are typical in the franchise industry, as they ensure consistent brand promotion and awareness. However, the specific amounts and percentages can vary significantly between different franchise systems. Prospective franchisees should carefully consider these ongoing costs when evaluating the overall financial investment required to operate a Beggars Pizza franchise.