What is the definition of the 'Brand Fund' for a Beggars Pizza franchise?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
The Brand Fund will be maintained and administered by Franchisor or its affiliate as follows:
- 12.5.1 Franchisor or its affiliate will direct all advertising programs, with sole discretion over the concepts, materials, and media used in such programs and the placement and allocation thereof.
Franchisee agrees and acknowledges that the Brand Fund is intended to maximize general public recognition, acceptance, and use of the System and that Franchisor or its
affiliate is not obligated while administering the Brand Fund to make expenditures for Franchisee that are equivalent or proportionate to Franchisee's contributions or to ensure that any particular franchisee benefits directly or indirectly from expenditures by the Brand Fund.
12.5.2 The Brand Fund, all contributions thereto, and any earnings thereon, will be used exclusively to meet any costs of maintaining, administering, directing, conducting and preparing advertising, marketing, public relations, and/or promotional programs and materials, and any other activities which Franchisor or its affiliate believes will enhance the image of the System including, without limitation, the costs of preparing and conducting radio, cable television, print, and Internet-based advertising campaigns; utilizing Networking Media Sites and other emerging media or promotional tactics; developing, maintaining, and updating a Website on the Internet; review of locally produced advertisements; door hangers, mailers, inserts and coupons; brochures and promotional materials; market research, market surveys, and sponsorships; web site design and maintenance; public relations and related retainers; mystery shoppers for the System and competitors; celebrity endorsements; trade shows including, without limitation, 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 and developing menu items; providing promotional and other marketing materials and services to the businesses operating under the System; developing poster, banners, and signs; and advertising for the sale of franchises.
12.5.3 All sums paid by Franchisee to the Brand Fund will be maintained in an account separate from the other monies of Franchisor and will not be used to defray any of Franchisor's or its affiliate's expenses, except for such reasonable costs and overhead, if any, as Franchisor or its affiliate may incur in activities reasonably related to the direction and implementation of the Brand Fund and advertising programs for franchisees and the System including, without limitation, costs of personnel for creating and implementing advertising, promotional and marketing programs, accounting expenses, and other out of pocket expenses to third parties incurred by the Brand Fund. The Brand Fund and any earnings thereon will not otherwise inure to the benefit of Franchisor or its affiliate. Franchisor will maintain separate bookkeeping accounts for the Brand Fund. Franchisor has formed an affiliated entity to control and administer the Brand Fund. Franchisee acknowledges that neither Franchisor nor its affiliate is a fiduciary to Franchisee of the monies in the Brand Fund.
12.5.4 It is anticipated that all contributions to and earnings of the Brand Fund will be expended for advertising and/or promotional purposes during the taxable year within which the contributions are made. If, however, excess amounts remain in the Brand Fund at the end of such taxable year, all expenditures in the following taxable years will be made first out of accumulated earnings from previous years, next out of earnings in the current year, and finally from contributions.
12.5.5 Although the Brand Fund is intended to be of perpetual duration, Franchisor or its affiliate maintains the right to terminate the Brand Fund. The Brand Fund will not be terminated until all monies in the Brand Fund have been expended for advertising and/or promotional purposes.
- 12.6 Advertising Materials.
All advertising and promotion (including, without limitation, any design, advertisement, sign, or form of publicity) by Franchisee must be in such media and of such type and format as Franchisor may approve, must be conducted in a dignified manner, and must conform to such standards and requirements as Franchisor may specify.
Franchisee will not use any such advertising
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza Franchise Disclosure Document, the Brand Fund is maintained and administered by Beggars Pizza or its affiliate. Beggars Pizza has sole discretion over the advertising programs, including the concepts, materials, media used, and the placement and allocation of these resources. The purpose of the Brand Fund is to maximize public recognition, acceptance, and use of the Beggars Pizza system. Beggars Pizza is not obligated to make expenditures for a franchisee that are equivalent or proportionate to the franchisee's contributions, nor is it required to ensure that any particular franchisee benefits directly or indirectly from the Brand Fund's expenditures.
The Brand Fund is used exclusively for the costs of maintaining, administering, directing, and preparing advertising, marketing, public relations, and promotional programs and materials. These activities are intended to enhance the image of the Beggars Pizza system. Specific examples of fund usage include radio, cable television, print, and Internet-based advertising campaigns, as well as utilizing networking media sites and other emerging promotional tactics. The fund also covers website development and maintenance, review of locally produced advertisements, door hangers, mailers, inserts, coupons, brochures, market research, sponsorships, public relations retainers, mystery shoppers, celebrity endorsements, trade shows, association dues, search engine optimization, advertising and public relations agencies, promotional items, menu development, and providing marketing materials to businesses operating under the Beggars Pizza system.
Sums paid into the Brand Fund are kept in a separate account from Beggars Pizza's other monies and are not used for the franchisor's expenses, except for reasonable costs and overhead related to the Brand Fund's direction and implementation. These costs may include personnel for creating advertising, promotional, and marketing programs, accounting expenses, and out-of-pocket expenses to third parties. The Brand Fund and its earnings do not benefit Beggars Pizza or its affiliates, and separate bookkeeping accounts are maintained for the fund. Beggars Pizza has formed an affiliated entity to control and administer the Brand Fund, and neither Beggars Pizza nor its affiliate acts as a fiduciary to franchisees regarding the Brand Fund monies.
While the Brand Fund is intended to be perpetual, Beggars Pizza or its affiliate reserves the right to terminate it, but only after all monies have been spent on advertising and promotional purposes. All advertising and promotion by franchisees must be approved by Beggars Pizza, conducted in a dignified manner, and conform to the standards specified by Beggars Pizza. Franchisees cannot use any advertising materials without prior approval from Beggars Pizza.