What is the Marketing Expenditure Cap related to the Bft Fund Contribution?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. Marketing Expenditure Cap.
Franchisor cannot require that the percentage of Gross Sales that Franchisee is required to contribute to the Fund, contribute to a Co-Op (as defined in Section 9.4), and spend on the Local Advertising Requirement (collectively, the "Required Marketing") exceed, in the aggregate, seven percent (7%) per month (the "Marketing Expenditure Cap"); provided, however, it is Franchisee's responsibility to provide Franchisor with written notice if the Required Marketing exceeds the Marketing Expenditure Cap, and until Franchisor receives Franchisee's written notice (the "Marketing Notice"), Franchisee will fully comply with the Required Marketing requirements, and no excess amounts will be refunded to Franchisee.
If the Required Marketing exceeds the Marketing Expenditure Cap, Franchisee may, after Franchisor receives Franchisee's Marketing Notice, reduce the Local Advertising Requirement, but only to the extent and for the time necessary to stay below the Marketing Expenditure Cap.
Franchisee must immediately return to full compliance with Required Marketing once the Marketing Expenditure Cap is no longer exceeded.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, there is a Marketing Expenditure Cap in place. Bft cannot require franchisees to contribute more than 7% of their gross sales per month in the aggregate for the fund, co-op contributions, and local advertising. However, it is the franchisee's responsibility to notify Bft in writing if the required marketing expenses exceed this 7% cap. Until Bft receives this written notice, the franchisee must continue to comply with the required marketing contributions, and no excess amounts will be refunded.
If the required marketing expenses do exceed the 7% Marketing Expenditure Cap, the franchisee can reduce their local advertising spending, but only to the extent necessary to stay below the cap. This reduction is temporary, and the franchisee must return to full compliance with the required marketing contributions once the expenditure cap is no longer exceeded.
This cap provides a degree of financial predictability and protection for Bft franchisees, preventing marketing costs from spiraling out of control. However, franchisees need to actively monitor their marketing expenses and promptly notify Bft if they approach or exceed the cap to take advantage of this provision. Failing to provide timely notice means the franchisee remains obligated to fulfill the original marketing requirements without any refunds for the excess spending.