Can the Bens Soft Pretzels Advertising Fund borrow money to cover deficits?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
The Advertising Fund will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for reasonable salaries, administrative costs and overhead as we may incur in activities reasonably related to the administration of the Advertising Fund and its advertising and marketing programs including conducting market research, preparing advertising and marketing materials and collecting and accounting for contributions to the Advertising Fund. We may spend in any fiscal year an amount greater or less than the aggregate contribution of all stores to the Advertising Fund in that year and the Advertising Fund may borrow from us or other lenders to cover deficits of the Advertising Fund or cause the Advertising Fund to invest any surplus for future use by the Advertising Fund. A report of receipts and disbursements of the Advertising Fund, which may be audited, will be prepared annually by us and will be furnished to you upon written request. Currently. The Advertising Fund is not audited.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to Bens Soft Pretzels' 2025 Franchise Disclosure Document, the Advertising Fund can borrow money to cover deficits. The document states that the Advertising Fund may borrow from Bens Soft Pretzels or other lenders to cover deficits. Additionally, the fund may invest any surplus for future use.
This means that if the contributions to the Advertising Fund are not sufficient to cover the planned advertising and marketing expenses, Bens Soft Pretzels has the option to borrow funds to ensure that advertising efforts can continue without interruption. This could be beneficial for franchisees as it ensures consistent marketing support, even during periods of lower contributions.
It's important to note that Bens Soft Pretzels also has the right to suspend contributions to and operation of the Advertising Fund, or even terminate it with 30 days' notice. If the fund is terminated, any unspent monies will be distributed to Bens Soft Pretzels, its affiliates, and its franchisees in proportion to their contributions over the preceding 12 months. Franchisees should consider these terms and conditions regarding the Advertising Fund and its potential impact on their business.