Can Bigfoot Forestry lend money to the brand fund if there is a deficit?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
Any surplus in the fund may be invested and we may lend money to the fund if there is a deficit. The fund is not a trust and we have no fiduciary obligations to you with respect to our administration of the fund. In terms of marketing activities paid for by the fund, we do not ensure that: (a) expenditures in (or affecting) a given geographic area are proportionate or equivalent to the brand fund fees paid by franchisees in that geographic area; or (b) franchisees benefit directly or in proportion to their brand fund fees. We will prepare, and make available to you upon request, an annual statement of fund operations, including deposits and disbursements. We may suspend or discontinue the fund at any time upon 30 days' prior notice.
Source: Item 23 — RECEIPT (FDD pages 42–162)
What This Means (2025 FDD)
According to Bigfoot Forestry's 2025 Franchise Disclosure Document, Bigfoot Forestry has the authority to lend money to the brand fund if there is a deficit. However, the brand fund is not a trust, and Bigfoot Forestry has no fiduciary obligations to franchisees regarding its administration. This means that while Bigfoot Forestry can provide funds to cover shortfalls, they are not legally bound to prioritize franchisees' interests in managing the fund.
Bigfoot Forestry retains sole discretion over various aspects of marketing and advertising activities, including content, concepts, materials, media, endorsements, frequency, and placement. This broad control means franchisees have limited input on how the brand fund is used. The FDD also states that Bigfoot Forestry does not ensure that marketing expenditures in a specific geographic area are proportionate to the brand fund fees paid by franchisees in that area, nor do they guarantee that franchisees will directly benefit in proportion to their contributions.
Franchisees are entitled to an annual statement of fund operations, detailing deposits and disbursements, upon request. Bigfoot Forestry also reserves the right to suspend or discontinue the fund with 30 days' notice. This clause highlights the potential instability of the fund and the possibility that franchisees may need to adjust their marketing strategies if the fund is terminated.
Prospective franchisees should consider the implications of Bigfoot Forestry's control over the brand fund and the lack of guaranteed proportional benefits. It would be prudent to inquire about the typical frequency and size of loans to the fund, as well as the circumstances under which the fund might be suspended or discontinued, to better understand the potential risks and benefits associated with the brand fund.