After Bft receives the Marketing Notice, how can a franchisee reduce marketing expenses?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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, a franchisee's required marketing expenses consist of contributions to the marketing fund, contributions to a co-op, and local advertising. Bft sets a limit on these combined expenses, called the "Marketing Expenditure Cap," at 7% of gross sales per month.
If a franchisee's required marketing expenses exceed this 7% cap, the franchisee must notify Bft in writing via a "Marketing Notice." After Bft acknowledges this notice, the franchisee can reduce their local advertising spending to stay within the Marketing Expenditure Cap.
However, this reduction is only permissible to the extent and for the time necessary to remain below the 7% Marketing Expenditure Cap. Once the required marketing expenses no longer exceed the cap, the franchisee must immediately resume full compliance with the original required marketing contributions. This ensures that franchisees maintain adequate marketing efforts as soon as financially feasible, supporting both their individual business and the Bft brand as a whole.