Can Bft require a franchisee to pay the Local Advertising Requirement amount directly to them?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Local Advertising Requirement | The greater of (a) $1,500 or (b) 2% of the prior month’s Gross Sales 1 | Payable monthly with your 1st Royalty payment each month | This is a spending requirement, but we reserve the right to have you pay this amount to us rather than spending it yourself. We may, on notice to you, adjust the amount of your required spending, subject to the Marketing Expenditure Cap. 3 |
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft franchisees are generally expected to manage their own local advertising spending. However, Bft retains the right to direct how these funds are used. The Local Advertising Requirement is the greater of $1,500 or 2% of the prior month’s Gross Sales.
Specifically, Bft reserves the right to require franchisees to pay the Local Advertising Requirement amount directly to Bft rather than spending it themselves. This gives Bft control over how those local advertising funds are utilized. Bft can adjust the amount of required spending with notice to the franchisee, subject to a Marketing Expenditure Cap.
This means that while franchisees typically have autonomy in local advertising, Bft can step in and manage those funds directly. Franchisees should clarify with Bft the specific circumstances under which Bft would exercise this right and how those funds would be used to benefit the franchisee's studio. Understanding Bft's criteria for direct management of local advertising funds is crucial for financial planning and marketing strategy.