Who is the Marketing Fund for Big Apple Bagels allowed to borrow from?

According to Big Apple Bagels' 2025 Franchise Disclosure Document, the Marketing Fund may borrow from Big Apple Bagels itself (the Franchisor) or from other lenders. This provision gives Big Apple Bagels flexibility in managing the Marketing Fund's finances. The Marketing Fund is used for marketing and related programs that Big Apple Bagels deems necessary or appropriate. Franchisees contribute to the Marketing Fund an amount equal to three percent (3%) of the Gross Revenues of the BAGELS Store [except that receipts from wholesale accounts are excluded from Gross Revenues for purposes of calculating Marketing Fund contributions only].

This borrowing ability allows the Marketing Fund to cover deficits or invest surpluses. This means that if the fund's expenses exceed its income in a given year, Big Apple Bagels can loan money to the fund to ensure that marketing activities continue uninterrupted. Conversely, if the fund has a surplus, it can invest the money for future use. This can help to smooth out the fund's cash flow and ensure that it has sufficient resources to support marketing efforts over the long term.

For a prospective franchisee, this is important because it demonstrates that Big Apple Bagels is committed to supporting the brand's marketing efforts. The ability to borrow funds ensures that marketing programs can continue even during periods of financial difficulty. However, franchisees should also be aware that the Marketing Fund is not a trust and that Big Apple Bagels does not owe any fiduciary obligation to franchisees for administering the fund. Franchisees should request and review the annual statement of monies collected and costs incurred by the Marketing Fund to understand how the funds are being managed.