What are some potential uses of the proceeds from the National Branding Account for Bor Restoration?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
We will administer the National Branding Account in our sole discretion. The proceeds may be used for the creation, production, and placement of advertising reasonably intended to benefit some or all franchisees in any local, regional, or national medium, in-house or outside agency costs and commissions, costs associated with the preparation of and presentation of an annual convention, creation, and production of the Internet, video, audio, and written advertisements, for the payment to us of costs related to
administering the National Advertising Account such as reasonable salaries, administrative costs, costs allocated to any conferences, travel expenses, and overhead, and for any other commercially reasonable purpose consistent with this paragraph.
Source: Item 11 — (FDD pages 22–28)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the National Branding Account is funded by the National Branding Fee, which Bor Restoration may collect in the future as either a percentage of gross sales or a fixed dollar amount. These fees are due at the same time as the royalty payments. The funds in the National Branding Account are not held in a trust, and Bor Restoration assumes no fiduciary duty in administering it. Any unspent funds in the account at the end of a year will be carried over to the next year. Bor Restoration has the sole discretion in administering the National Branding Account.
The proceeds from the National Branding Account may be used for various advertising and administrative purposes. These include the creation, production, and placement of advertising intended to benefit some or all franchisees in local, regional, or national media. The funds can also cover in-house or outside agency costs and commissions, as well as costs associated with preparing and presenting an annual convention. Additionally, the account can be used for creating and producing internet, video, audio, and written advertisements.
Furthermore, the National Branding Account can be used to pay Bor Restoration's costs related to administering the account. These costs may include reasonable salaries, administrative costs, costs allocated to conferences, travel expenses, and overhead. The funds can also be used for any other commercially reasonable purpose consistent with the guidelines provided in the FDD. Bor Restoration does not guarantee that advertising expenditures from the National Branding Account will directly benefit any specific franchisee or on a pro-rata basis.
Bor Restoration retains significant control over the National Branding Account and its usage. While the intention is to benefit franchisees through advertising and related activities, franchisees should be aware that Bor Restoration has broad discretion in how these funds are spent and is not obligated to ensure direct or proportional benefits to each franchisee.