Does the Bigfoot Forestry Company-Owned Outlet pay brand fund fees?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
& Costs: Franchised Outlets must pay the fees and incur the expenses included within Imputed Fees and Costs. Our Company-Owned Outlet: (a) does not pay brand fund fees (1% of Gross Sales), royalty fees (4.5% to 7% of Gross Sales depending on Gross Sales bracket) or technology fees ($350 per month); and (b) is not required to spend a minimum monthly amount on local marketing equal to or greater than the Local Marketing Commitment (greater of 2% of monthly Gross Sales or $1,000 per month). This FPR presents 2 sets of EBITDA figures, including: (1) "EBITDA" which is calculated based on actual expenses incurred by the Company-Owned Outlet and does not account for Imputed Fees and Costs; and (2) "Adjusted EBITDA" which, for illustrative purposes, is calculated in a manner that takes into account all Imputed Fees and Costs the Company-Owned Outlet would have incurred if it were a Franchised Outlet. Imputed Fees and Costs are discussed in more detail in Notes 3, 4 and 5 below.
- 3. Imputed Royalty & Brand Fund Fees: Our Company-Owned Outlet did not pay royalty fees or brand fund fees during the Measuring Year. In the Imputed Fees & Costs section of the EBITDA calculation, we have included the royalty fees ($44,945) and brand fund fees ($7,382) the Company-Owned Outlet would have incurred as a franchisee.
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Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 36–39)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, the company-owned outlet does not pay brand fund fees. Specifically, the FDD states that the company-owned outlet does not pay brand fund fees, which are calculated as 1% of gross sales for franchised outlets. This is further clarified in the notes, which state that the company-owned outlet did not pay brand fund fees during the measuring year. However, for illustrative purposes, the financial performance representation includes the brand fund fees ($7,382) that the company-owned outlet would have incurred if it were a franchised outlet in the calculation of Adjusted EBITDA.
This distinction is important for prospective franchisees because it highlights a difference in the cost structure between company-owned and franchised Bigfoot Forestry businesses. While franchisees are required to contribute 1% of their gross sales to the brand fund, the company-owned outlet is not subject to this fee. This difference is factored into the Adjusted EBITDA calculation, which aims to provide a more accurate comparison of the potential profitability of a franchised outlet versus the company-owned outlet.
It's worth noting that while the company-owned outlet does not directly pay brand fund fees, the FDD includes an 'Imputed Fees & Costs' section to show what these costs would be if the outlet were franchised. This provides potential franchisees with a clearer picture of the expenses they can expect to incur. The $7,382 imputed brand fund fees, along with other imputed costs like royalty and technology fees, are subtracted from the EBITDA to arrive at the Adjusted EBITDA, offering a more realistic view of a franchisee's potential earnings.