Can Bft adjust the amount of required contributions to the Co-Op?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ributions, subject to the Marketing Expenditure Cap. 3 | | Regional or Local Advertising Co-Op | As the Co-Op determines (not currently charged) | As the Co-Op determines | We may establish regional cooperatives comprised of Studios that are within a given geographical area (each, a “Co-Op”). If a Co-Op is established where your Studio is located, you will be required to participate in that Co-Op and contribute to that Co-Op in the amounts the Co-Op determines. We may, on notice to you, adjust the amount of your required contributions to the Co-Op, subject to the Marketing Expenditure Cap. 3 | | Local Advertising Requirement | The greater of (a) $1,500 or (b) 2% of the prior month’s Gross Sales 1 | Payable monthly with your 1st Royalty payment each month | This is a spending requirement, but we reserve the right to have you pay this amount to us rather than spending it yourself. We may, on notice to you, adjust the amount of your required spending, subject to the Marketing Expenditure Cap. 3 | | Type of Fee | Amount | Due Date | Remarks | |---|---|---|---| | Music Licensing Fee 4 | Amounts charged by the providers and/or applicable performing rights organizations (PROs) for such music licensing | As invoiced or otherwise agreed | We may require that the music licensing fee (the “Music Licensing Fee”) amount be paid directly to performing rights organizations (PROs) or to our then-current Approved Supplier (which may be us or our affiliate) that handles and manages these licenses for System franchisees. | | Insurance Policies 5 | Amount of unpaid premium | As agreed | Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you.
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft has the ability to adjust the amount franchisees are required to contribute to a Regional or Local Advertising Co-Op. If Bft establishes a Co-Op in the franchisee's area, participation and contribution are mandatory, with the specific amounts determined by the Co-Op itself. Bft can adjust these required contributions with notice to the franchisee, but these adjustments are subject to a Marketing Expenditure Cap.
The Marketing Expenditure Cap limits the total percentage of Gross Sales that Bft can require franchisees to contribute to the Brand Development Fund, a Regional or Local Advertising Co-Op, and spend on the Local Advertising Requirement. This combined spending cannot exceed 7% per month. If the required marketing expenses surpass this cap, the franchisee must notify Bft in writing. Until Bft receives this notice, the franchisee must continue to comply with the original marketing requirements, and no excess amounts will be refunded.
After providing written notice, the franchisee can reduce their Local Advertising Requirement to stay within the 7% Marketing Expenditure Cap. However, this reduction is only allowed to the extent and for the time necessary to remain below the cap. Once the marketing requirements no longer exceed the cap, the franchisee must immediately return to full compliance with the original Required Marketing contributions. This ensures that while Bft has some flexibility in adjusting Co-Op contributions, there are safeguards in place to protect franchisees from excessive marketing expenses.