When does the weekly Brand Development Fund contribution obligation begin for Bft franchisees?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Contributions to Brand Development Fund 2 | Currently, 2% of Gross Sales 1 | Payable weekly around the same time and in the same manner as the Royalty | Your contributions (the “Fund Contributions”) to the Brand Development Fund (the “Fund”) will begin when your Studio begins generating revenue from operations. We may, on notice to you, adjust the amount of your required Fund Contributions, subject to the Marketing Expenditure Cap. 3 |
2 Brand Development Fund. We (and our affiliates) have established the Fund and you will be required to make a weekly Fund Contribution beginning the date your Studio begins collecting revenue from business operations. The Fund Contributions may be used for (among other things) product development; signage; creation, production and distribution of marketing, advertising, public relations and other materials in any medium, including the internet; social media; administration expenses; brand/image campaigns; media; national, regional and other marketing programs; activities to promote current and/or future Studios and the brand; agency and consulting services; research; and any expenses approved by us and associated with your Studio. We will have sole discretion over all matters relating to the Fund.
3Marketing Expenditure Cap. We cannot require that the percentage of Gross Sales that you are required to contribute to the Fund, contribute to a Regional or Local Advertising Co-Op, and spend on the Local Advertising Requirement (collectively, the "Required Marketing") exceed, in the aggregate, seven percent (7%) per month (the "Marketing Expenditure Cap"). However, you must provide us with written notice if the Required Marketing exceeds the Marketing Expenditure Cap, and until we receive your written notice (the "Marketing Notice"), you must comply with the Required Marketing requirements, and no excess amounts will be refunded to you. If the Required Marketing exceeds the Marketing Expenditure Cap, you may, after we receive your Marketing Notice, reduce the Local Advertising Requirement, but only to the extent and for the time necessary to stay below the Marketing Expenditure Cap. You must immediately return to full compliance with Required Marketing once the Marketing Expenditure Cap is no longer exceeded.
Source: Item 6 — OTHER FEES (FDD pages 21–26)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, franchisees are required to make weekly contributions to the Brand Development Fund starting when their studio begins collecting revenue from business operations. The contribution is currently set at 2% of Gross Sales, payable weekly around the same time and in the same manner as the royalty fees. Bft may adjust the amount of the required Fund Contributions with notice to the franchisee, subject to a Marketing Expenditure Cap.
The Brand Development Fund is used for various purposes, including product development, marketing, advertising, public relations, and other activities to promote the brand. Bft retains sole discretion over all matters relating to the Fund. This means that while franchisees contribute to the fund, Bft ultimately decides how the money is spent.
It's important to note the existence of a "Marketing Expenditure Cap." Bft cannot require franchisees to contribute more than 7% of Gross Sales per month in the aggregate for the Brand Development Fund, Regional or Local Advertising Co-Op, and Local Advertising Requirement. Franchisees must provide written notice to Bft if the required marketing contributions exceed this cap. Until Bft receives this notice, franchisees must comply with the required marketing contributions. After the notice, franchisees may reduce their Local Advertising Requirement to stay below the cap. Franchisees must immediately return to full compliance with the Required Marketing once the Marketing Expenditure Cap is no longer exceeded.