Is the first month's local advertising spending requirement for a Beggars Pizza prorated?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
authority.
Note 3. Our affiliate, Beg Adv, Inc., maintains a dedicated marketing fund for the benefit of the System (the "Brand Fund"). Your required contribution to the Brand Fund is in addition to the amount you must spend on local advertising for the Restaurant. During your first three months of
operation, you must spend at least $3,000 per month on local advertising (with the first month prorated if necessary), and for each subsequent month you must spend at least 2% of your monthly Gross Sales. See Item 11 of this disclosure document for more information about the Brand Fund and your local marketing
Source: Item 6 — OTHER FEES (FDD pages 9–11)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the local advertising spending requirement for the first month of operation is prorated if necessary. During the first three months of operation, a Beggars Pizza franchisee must spend at least $3,000 per month on local advertising. This initial advertising spend is in addition to contributions to the Brand Fund, which is managed by Beggars Pizza's affiliate, Beg Adv, Inc. After the first three months, the local advertising spending requirement changes to at least 2% of the monthly Gross Sales.
The proration of the first month's advertising spending is beneficial for new Beggars Pizza franchisees, as it allows for flexibility in managing initial costs. If a location opens mid-month, the franchisee is not required to spend the full $3,000, reducing the financial burden during the opening phase. This is a fairly common practice in franchising, as it acknowledges the varying opening dates and associated ramp-up periods for new locations.
Prospective franchisees should carefully consider the ongoing advertising obligations, including both the local advertising spend and the Brand Fund contributions, as these can significantly impact profitability. Understanding the details of what qualifies as local advertising and how Gross Sales are calculated is also crucial for budgeting and financial planning. Beggars Pizza franchisees should also note that the Brand Fund contributions are separate from the local advertising expenditure.