What were the advertising costs for Bevaris Alliance in 2023?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
OUNTING POLICIES (CONTINUED):
the period in which the related service or sale occurs. In addition to the royalty fee there is a 2% system marketing fee.
The Company contracts directly with each school or location for the services to be provided by the franchisee. The Company then assigns the contract to the franchisee which is responsible for providing the meals, beverages and other services under the contract and billing and collecting revenue from such activity.
Advertising costs are expensed as incurred. Advertising costs for 2023 and 2022 were $1,230 and $
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, the company's advertising costs for 2023 were $1,230. This figure represents the expenses Bevaris Alliance incurred for advertising during the fiscal year. In comparison, the advertising costs for the previous year, 2022, were $3,212.
It is important to note that franchisees also pay a 2% system marketing fee based on their weekly gross sales receipts. These fees are intended to fund the development and expansion of the Bevaris Alliance franchise system, including advertising and marketing programs. The balance of the system marketing reserve fund at the end of 2023 was $174,327, significantly higher than the $72,220 at the end of 2022, suggesting increased marketing activity or accumulation of funds for future campaigns.
For a prospective franchisee, the relatively low advertising costs reported by the company itself, coupled with the separate system marketing fund, indicates a dual approach to marketing. While Bevaris Alliance directly spent a modest amount on advertising, a larger pool of funds is available through the system marketing reserve, which is supported by franchisee contributions. This structure is fairly typical in franchising, where both the franchisor and franchisees contribute to marketing efforts.