Is the Bft Fund required to be segregated from the Franchisor's other funds?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- F. The Fund need not be segregated from but will be accounted for separately from Franchisor's other funds and Franchisor will not use the Fund for its general operating expenses. All taxes of any kind incurred in connection with or related to the Fund, its activities, contributions to the Fund and/or any other Fund aspect, whether imposed on Franchisor, the Fund or any other related party, will be the sole responsibility of the Fund. Franchisor will not be required to audit the Fund, but will provide an annual accounting of the Fund at the written request of Franchisee that is made 120 days after the fiscal year at issue. All interest earned on monies contributed to, or held in, the Fund will be remitted to the Fund and will be subject to the restrictions of the relevant franchise agreements.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the Fund does not need to be segregated from Bft's other funds. However, the FDD stipulates that the Fund will be accounted for separately from Bft's other funds, and Bft will not use the Fund for its general operating expenses. All taxes incurred in connection with the Fund will be the sole responsibility of the Fund.
Bft is not required to audit the Fund, but will provide an annual accounting of the Fund at the written request of the franchisee that is made 120 days after the fiscal year at issue. All interest earned on monies contributed to, or held in, the Fund will be remitted to the Fund and will be subject to the restrictions of the relevant franchise agreements.
This arrangement provides some transparency and accountability for franchisees, as they can request an annual accounting of the Fund. However, the lack of a mandatory audit may be a concern for some franchisees. It is important for prospective franchisees to understand how the Fund is managed and how their contributions are being used to promote the Bft brand.