If Bhc spends less than the total contributions to the fund, what can it do with the surplus?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (xi) We may spend in any fiscal year an amount greater or less than the aggregate contributions to the Marketing and Promotion Fee in that year and may cause it to borrow funds to cover deficits or invest in surplus funds.
If we spend less than the total of all contributions to the fund during any fiscal year, we may accumulate those sums for use in later years.
If we or an affiliate advances money to the Fund beyond what it contributes on account of our company or affiliate-owned BHC Restaurant, we will be entitled to reimbursement.
Any interest earned on monies held in the Fund may be retained by us for our own use, in our discretion.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, And Training (FDD pages 29–38)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, if Bhc spends less than the total contributions to the Marketing and Promotion Fund in a fiscal year, it may accumulate the surplus for use in later years. Bhc also has the right to retain any interest earned on the monies held in the fund for its own use, at its discretion.
This means that while franchisees contribute to the Marketing and Promotion Fund, Bhc has considerable discretion over how the funds are managed. Bhc can carry over surplus funds to future periods, allowing for flexibility in advertising and promotional spending. However, Bhc is not obligated to spend the money right away.
Additionally, Bhc can retain any interest earned on the fund, which could provide an additional revenue stream for the company. While Bhc intends for the fund to be perpetual, it can terminate the fund if it spends all the money for advertising and promotional purposes. Franchisees should consider these factors and how they align with their expectations for marketing and advertising support when evaluating the Bhc franchise opportunity.