Can the Beggars Pizza franchisor's affiliate administer the Brand Fund?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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.
12.5.5 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.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the Brand Fund can be administered by the franchisor's affiliate. Specifically, Beggars Pizza has formed an affiliated entity to control and administer the Brand Fund. This means that a separate, but related, company is responsible for managing the funds collected for advertising and promotional activities.
Beggars Pizza or its affiliate has sole discretion over the advertising programs, including the concepts, materials, and media used. The Brand Fund uses contributions and earnings exclusively for advertising, marketing, public relations, and promotional programs. These programs aim to enhance the image of the Beggars Pizza system.
While the Brand Fund is intended to be perpetual, Beggars Pizza or its affiliate retains the right to terminate it, but only after all monies have been spent on advertising and promotional purposes. Franchisees should be aware that neither Beggars Pizza nor its affiliate acts as a fiduciary regarding the Brand Fund monies, meaning they do not have the same legal duty to prioritize the franchisee's interests above their own.