What is the definition of 'Brand Fund' for Big Frog Custom T Shirts More?
Big_Frog_Custom_T_Shirts_More Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor has established a national fund on behalf of the System for national advertising, marketing, and brand development (the "Brand Fund").
Franchisee is required to contribute a percentage of the Gross Revenue generated monthly by Franchisee's Franchised Business to the Brand Fund, as determined by Franchisor ("Brand Fund Contribution").
Franchisor reserves the right, in Franchisor's sole discretion and at any time and from time to time, to increase the amount of the Brand Fund Contribution to any amount not to exceed one and a half percent (1.5%) of Franchisee's Gross Revenue.
Payments will be made in the same manner and time as the Royalty Fees.
If Franchisee fails to timely report Gross Revenue, then, in addition to a late fee and interest pursuant to Sections 6.2 and 6.3 hereof, Franchisor shall collect one hundred twenty percent (120%) of the last Brand Fund Contribution payable.
Franchisor shall reconcile amounts when Gross Revenues are reported.
- 13.3.2 Franchisor shall direct the Brand Fund and shall have sole discretion to approve or disapprove the creative concepts, materials and media used in such programs and the placement and allocation thereof.
Franchisee agrees and acknowledges that the Brand Fund is intended to maximize general public recognition and acceptance of the Marks and enhance the collective success of all Franchised Businesses operating under the System.
13.3.3 Franchisor may, but has no obligation to, contribute to the Brand Fund on the same basis as Franchisee with respect to Big Frog outlets operated by Franchisor or Franchisor's affiliates.
13.3.4 Franchisor may use the Brand Fund to satisfy any and all costs of developing, preparing, producing, directing, administering, conducting, maintaining and disseminating advertising, marketing, promotional and public relations materials, programs, campaigns, sales and marketing seminars and training programs of every kind and nature, through media now existing or hereafter developed (including, without limitation, the cost of television, radio, magazine, social media, newspaper and electronic advertising campaigns; direct mail and outdoor billboard advertising; public relations activities; conducting marketing research, employing advertising agencies to assist therein; developing, enhancing and maintaining the Website; and staff salaries and other personnel and departmental costs for advertising that Franchisor internally administers or prepares).
While Franchisor does not intend that any part of the Brand Fund will be used for advertising which is principally a solicitation for franchisees, Franchisor reserves the right to use the Brand Fund for public relations, to explain the franchise system, and/or to include a notation in any advertisement indicating "Franchises Available."
- 13.3.5 The Brand Fund will not be used to defray any of Franchisor's general operating expenses, except for reasonable administrative costs and overhead that Franchisor may incur in activities related to the administration and direction of the Brand Fund and such costs and expenses pursuant Section 13.3.4.
The Brand Fund and its earnings shall not otherwise inure to Franchisor's benefit except that any resulting technology and intellectual property shall be deemed the property of Franchisor.
- 13.3.6 In administering the Brand Fund, Franchisor undertakes no obligation to make expenditures for Franchisee that are equivalent or proportionate to Franchisee's contribution or to ensure
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2024 FDD)
According to Big Frog Custom T Shirts More's 2024 Franchise Disclosure Document, the Brand Fund is a national fund established by the company on behalf of its franchise system for national advertising, marketing, and brand development. Franchisees are required to contribute a percentage of their monthly gross revenue to this fund, known as the Brand Fund Contribution. Big Frog Custom T Shirts More retains the right to increase this contribution up to a maximum of 1.5% of the franchisee's gross revenue. Payments to the Brand Fund are made in the same manner and at the same time as royalty fees.
Big Frog Custom T Shirts More has the sole discretion to direct the Brand Fund, including approving or disapproving creative concepts, materials, and media used in advertising and marketing programs, as well as their placement and allocation. The purpose of the Brand Fund is to maximize public recognition and acceptance of the company's trademarks and enhance the collective success of all franchised businesses operating under the Big Frog Custom T Shirts More system.
While Big Frog Custom T Shirts More may contribute to the Brand Fund for company-owned outlets, they are not obligated to do so. The funds can be used for various advertising, marketing, promotional, and public relations activities, including television, radio, magazine, social media, newspaper, and electronic advertising campaigns, direct mail, outdoor billboard advertising, public relations activities, marketing research, advertising agencies, website development, and staff salaries related to advertising. The Brand Fund will not be used for Big Frog Custom T Shirts More's general operating expenses, except for reasonable administrative costs and overhead related to the fund's administration.
Although the Brand Fund is intended to be perpetual, Big Frog Custom T Shirts More reserves the right to terminate it at any time, for any reason. Franchisees should note that Big Frog Custom T Shirts More does not guarantee that expenditures from the Brand Fund will be equivalent or proportionate to a franchisee's contribution, or that any particular franchisee will directly benefit from the advertising efforts.