What is the definition of 'Gross Sales' in relation to the Bens Soft Pretzels Advertising Fund Fee?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
We will administer an advertising and marketing fund (the "Advertising Fund") for the advertising and marketing programs as we may deem necessary or appropriate. You must contribute to the Advertising Fund up to 4% (currently 1.5%) of the Gross Sales of your Store, as determined by us, payable together with the Royalty Fee due under the Franchise Agreement. The Advertising Fund Fee is separate from any local marketing requirements. We have the right to increase the Advertising Fund Fee up to 4% upon 90 days' advance written notice, although if we increase the Advertising Fund Fee to 3% or 4% we will reduce the local advertising requirements accordingly such that your total required marketing expenditure does not exceed 4% of Gross Sales.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 23–30)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, franchisees are required to contribute to an advertising and marketing fund. The amount to be contributed is up to 4% of the store's Gross Sales, but is currently set at 1.5%. This contribution is paid together with the Royalty Fee as outlined in the Franchise Agreement. The document specifies that the Advertising Fund Fee is distinct from any local marketing requirements.
Bens Soft Pretzels retains the right to increase the Advertising Fund Fee up to the maximum of 4% of Gross Sales. However, they must provide franchisees with 90 days' advance written notice before implementing such an increase. If Bens Soft Pretzels increases the fee to 3% or 4%, they will reduce the local advertising requirements accordingly, ensuring that the total required marketing expenditure does not exceed 4% of Gross Sales.
The FDD excerpt does not provide a specific definition of 'Gross Sales'. A prospective franchisee should seek clarification from Bens Soft Pretzels regarding what constitutes 'Gross Sales' for the purpose of calculating the Advertising Fund Fee. This clarification should cover whether 'Gross Sales' includes all revenue, or if there are any deductions for things like discounts, employee meals, or other factors.