How is the BA Advertising Program Royalty calculated for a Beverly Anns Cookie franchise?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
We have created an advertising program ("BA Advertising Program") which allows franchisees to sell advertising segments on digital monitors located on the GRMs (not GRTs) and Fixed Location Businesses in order to capture new business opportunities that may increase the desirability and popularity of the Beverly Ann's Cookie brand. We allow existing Beverly Ann's Cookie franchisees who are in full compliance with their franchise agreements to participate in the BA Advertising Program. Franchisee participate in the BA Advertising Program is currently at the franchisees' option but we reserve the right to make participation mandatory. Franchisees will pay a royalty of 15% of the Advertising Gross Sales generated from the BA Advertising Program. The term "Advertising Gross Sales" means all revenue of any kind generated in connection with Franchisee's participation in the BA Advertising Program excluding taxes.
Source: Item 6 — OTHER FEES (FDD pages 15–24)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, the BA Advertising Program Royalty is calculated as 15% of the Advertising Gross Sales. The BA Advertising Program allows franchisees to sell advertising segments on digital monitors located on GRMs (not GRTs) and Fixed Location Businesses. This program aims to capture new business opportunities and increase the brand's desirability. Franchisee participation in the BA Advertising Program is currently optional, but Beverly Anns Cookie retains the right to make it mandatory in the future.
"Advertising Gross Sales" is defined as all revenue generated from a franchisee's participation in the BA Advertising Program, excluding taxes. This means that the royalty is based on the total income derived from advertising sales, before any tax deductions. The royalty is paid as incurred, meaning it is due as the advertising revenue is generated.
For a prospective Beverly Anns Cookie franchisee, this means that if they choose to participate in the BA Advertising Program, they will need to allocate 15% of their advertising revenue as a royalty payment to the franchisor. This royalty is in addition to other fees, such as the GRM/GRT royalty. Franchisees should consider the potential revenue from advertising sales against the royalty to determine if participation in the BA Advertising Program is financially beneficial. It's also important to note that Beverly Anns Cookie can change the participation from optional to mandatory, which would require all franchisees to pay this royalty if they generate advertising gross sales.