Can Body Brain Center invest any surplus of funds in the advertising fund?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Advertising fund fees will be kept in a separate account and revenues received will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs and overhead as we may incur in activities reasonably related to the administration or direction of the advertising fund and its local, regional or national advertising programs (which may include, without limitation: conducting market research, preparing and conducting television, radio, magazine, billboard, Internet, newspaper, digital advertising and other media programs and activities and employing advertising agencies to assist therewith, collecting and accounting for contributions to the advertising fund, and paying for the preparation and distribution of marketing materials and financial accountings of the advertising fund). None of the advertising fund fees will be used for advertisements principally directed at selling additional franchises. All funds deposited into the advertising fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of funds in the advertising fund may be invested and we may lend money to the advertising fund if there is a deficit. During the fiscal year ended December 31, 2024, we spent the advertising fund fees in the following manner: 0% for production; 14% for media placement; 0% for administrative expenses; and 86% for other purposes.
Source: Item 11 — FRANCHISOR'S ASSISTANCE**, ADVERTISING, **COMPUTER SYSTEMS AND TRAINING (FDD pages 20–29)
What This Means (2025 FDD)
According to the 2025 FDD, Body Brain Center has the ability to invest any surplus of funds that are in the advertising fund. The advertising fund is kept in a separate account, and revenues are accounted for separately from Body Brain Center's other funds. These advertising funds will not be used to defray any of Body Brain Center's general operating expenses, except for reasonable salaries, administrative costs, and overhead related to administering the advertising fund and its advertising programs.
These programs may include market research, preparing and conducting advertising through various media, employing advertising agencies, collecting and accounting for contributions, and paying for marketing materials and financial accountings. The FDD specifies that advertising fund fees cannot be used for advertisements primarily aimed at selling additional franchises. Any funds deposited into the advertising fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year.
For the fiscal year ended December 31, 2024, Body Brain Center spent the advertising fund fees as follows: 0% for production, 14% for media placement, 0% for administrative expenses, and 86% for other purposes. Additionally, Body Brain Center may lend money to the advertising fund if there is a deficit.