What is the franchisee's obligation regarding the Fund Contribution to Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor's personnel.
- F. Costs and Expenses. Franchisor will not, under any circumstances, be responsible for, and the indemnities provided in Section 11.2 shall apply to, costs and expenses (including wages, benefits, and travel-related expenses) incurred by or owed to Franchisee or its personnel in or as a result of attending or participating in any training program described in this Agreement or otherwise provided by Franchisor or its designee.
- G. Training Fee for Certain Training. Franchisor may charge its then-current Training Fee in connection with training that (a) Franchisee requests Franchisor provide (other than in connection with Pre-Opening Instructor Training that is provided by Franchisor personnel at Franchisor's headquarters), or (b) Franchisor provides on-site at Franchisee's Studio.
- 5.6 Fund Contribution. Franchisor (and its affiliates) have established a creative brand development fund to promote the System, Marks and brand with which the Studio is associated generally (the "Fund"). Franchisee shall contribute to the Fund, as directed by Franchisor from time to time, two percent (2%) of the Gross Sales of its Studio (the "Fund Contribution"), commencing once the Studio starts generating revenue from its business operations of its Studio. The Fund Contribution will typically be paid in the same manner and at the same interval that the Royalty Fee is collected (based on the Gross Sales of the Studio over the immediately preceding reporting period). Franchisor has the right, at any time and on notice to Franchisee, to change the amount of the Fund Contribution in accordance with Section 9.1 below.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees must contribute to a creative brand development fund to promote the Bft system, marks, and brand. This contribution, referred to as the "Fund Contribution," is set at two percent (2%) of the Gross Sales of the franchisee's studio. This obligation begins once the studio starts generating revenue from its business operations.
The Fund Contribution is typically paid in the same manner and at the same interval as the Royalty Fee, which is based on the Gross Sales of the studio over the immediately preceding reporting period. Bft retains the right to change the amount of the Fund Contribution, provided they give the franchisee at least sixty (60) days' written notice before the change takes effect, and subject to a Marketing Expenditure Cap.
The fund is administered by Bft (or its affiliates) with advice from a Fund advisory committee (FAC). The FAC represents Bft Studio franchisees and advises Bft on advertising, marketing, and public relations programs financed by the Fund. However, the FAC is purely advisory and has no operational or ultimate decision-making authority. The franchisee acknowledges that Bft is not obligated to spend amounts equivalent or proportionate to the franchisee's contribution, or to ensure that any particular Bft Studio benefits directly or pro rata from advertising or promotion conducted with the Fund Contributions.