Can Brand Fund monies for Beggars Pizza be used for advertising the sale of franchises?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund, all contributions to it, and any of its earnings are used exclusively to meet the costs of maintaining, administering, directing, conducting, and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which we believe will enhance the
image of the System including the costs of preparing and conducting radio, television, print, and Internet-based advertising campaigns, utilizing social and business networking media sites and other emerging media or promotional tactics, developing, maintaining, and updating webpages on the Internet, reviewing locally-produced advertisements, creating door hangers, mailers, inserts, coupons, brochures, and promotional materials, market research, market surveys, sponsorships, website design and maintenance, public relations and related retainers, mystery shoppers for the System and competitors, celebrity endorsements, trade shows (including costs of travel and personnel expenses, trade booths, and specialty entertainment), association dues, search engine optimization, employing advertising and/or public relations agencies, purchasing promotional items, menu development, providing promotional and other marketing materials and services to businesses operating under the System, developing posters, banners, and signs, and advertising the sale of franchises. (Franchise Agreement, Section 12.5.2.) Media coverage for advertising expenditures will be local and regional.
During our most recent fiscal year, 57% of Brand Fund expenditures were spent on media placement, team sponsorships, and donations; 33% on production, and 10% on administrative and related expenses. No Brand Fund fees were used for the solicitation of new franchise sales. We conduct advertising using third-party advertising agencies and in-house marketing personnel. We do not anticipate any Brand Fund expenditures will be principally used to solicit new franchise sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 19–26)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the Brand Fund can be used for advertising the sale of franchises. The Brand Fund, which franchisees contribute to weekly at a rate of 1% of their gross sales, is used to enhance the image of the Beggars Pizza system.
The FDD specifies that the Brand Fund can cover the costs of various advertising, marketing, and promotional activities. These activities include preparing and conducting advertising campaigns across different media, developing and maintaining websites, creating promotional materials, conducting market research, and participating in trade shows. Specifically, the FDD states that the Brand Fund can be used for "advertising the sale of franchises."
However, the document also indicates that in the most recent fiscal year, no Brand Fund fees were used for soliciting new franchise sales, with 57% of expenditures going towards media placement, team sponsorships, and donations, 33% towards production, and 10% towards administrative expenses. Beggars Pizza also states that they do not anticipate that any Brand Fund expenditures will be principally used to solicit new franchise sales. This suggests that while the Brand Fund can technically be used for advertising the sale of franchises, Beggars Pizza has not recently allocated funds for this purpose.