Can Bft increase the Local Advertising Requirement during the term?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
uthorized under this Agreement.
9.2 Initial Marketing Spend; Local Marketing Activities.
- A. Initial Marketing Spend. Franchisee must spend a minimum of $15,000 (the "Initial Marketing Spend") in connection with the initial sales and marketing activities set forth in connection with (i) Franchisee's approved Opening Support Program, and (ii) other marketing and promotional activities that Franchisor approves or designates. Franchisor may also require that Franchisee expend all or any portion of the Initial Marketing Spend on initial marketing/advertising and/or public relations materials or services that are purchased from an approved supplier. The Initial Marketing Spend will not count towards Franchisee's local advertising expenditure requirements provided in Section 9.2.B below and is not subject to the Marketing Expenditure Cap.
- B. Local Advertising Requirement. Franchisee is responsible for local advertising and marketing activities to attract members to the Studio. Franchisee must spend the greater of (a) $1,500, or (b) two percent (2%) of Gross Sales each per month on approved local advertising and marketing activities (excluding agency and vendor fees) designed to promote the Studio within the Designated Territory (the "Local Advertising Requirement"). Franchisor may increase the Local Advertising Requirement, at its discretion, from time to time during the Term, subject to the Marketing Expenditure Cap. Upon Franchisor's written request, Franchisee must provide Franchisor with an accounting of all expenditures made by Franchisee to comply with this Section, along with any invoices or other documentation to support such expenditures.
- C. Advertising Standards. Franchisee's advertising will be in good taste and conform to ethical and legal standards and Franchisor's requirements. Franchisee must submit samples of all advertising and promotional materials (and any use of the Marks and/or other forms of commercial identification) for any media, including the Internet or otherwise.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft franchisees are responsible for local advertising and marketing activities to attract members to their studio. Franchisees must spend the greater of $1,500 or 2% of gross sales each month on approved local advertising and marketing activities. This excludes agency and vendor fees and is designed to promote the studio within the designated territory. This is referred to as the Local Advertising Requirement.
Bft has the discretion to increase the Local Advertising Requirement from time to time during the term of the franchise agreement. However, this is subject to a Marketing Expenditure Cap. Franchisees must provide Bft with an accounting of all expenditures made to comply with the local advertising requirements upon written request, along with invoices or other documentation to support such expenditures.
The Marketing Expenditure Cap limits the total percentage of gross sales that Bft can require franchisees to contribute to the advertising fund, co-ops, and local advertising. This total cannot exceed 7% per month. If the required marketing expenses exceed this cap, the franchisee must notify Bft in writing. After providing this notice, the franchisee can reduce their local advertising spending to stay below the 7% cap. Once the cap is no longer exceeded, the franchisee must return to full compliance with the original required marketing contributions.