What is the method of payment for Browns Chicken franchisee's Advertising Fund contribution?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
ng as Brown may deem necessary or appropriate, in its sole discretion. Brown shall, from time to time, formulate, develop, produce and conduct regional advertising and promotion programs in such form and media as it determines, in its sole discretion, to be most effective.
Franchisee shall pay to the Advertising Fund, as hereinafter provided, such amount as may be designated by Brown from time to time by written notice to Franchisee, not to exceed four percent (4%) of the Gross Sales (as hereinafter defined) of the Store. The Advertising Fund contribution shall be paid by Franchisee on Gross Sales for each Monday through Sunday weekly period together with the royalty fee as set forth in Paragraph l9.A of this Agreement. Franchisee's payments to the Advertising Fund shall be made by electronic transfer or automatic debit from Franchisee's bank account to the Advertising Fund account, as set forth in Paragraph 19.F. below.
Brown shall direct all advertising programs financed by the Advertising Fund, with sole discretion over the creative concepts, materials and endorsements used therein, and the geographic, market and media placement and allocation thereof.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, franchisees are required to make Advertising Fund contributions via electronic transfer or automatic debit from their bank account. The amount, which cannot exceed 4% of the store's Gross Sales, is determined by Browns Chicken and communicated to the franchisee in writing.
Payments are based on the Gross Sales for each weekly period, running from Monday to Sunday, and are submitted together with the royalty fee. This system ensures regular and consistent contributions to the Advertising Fund, which Browns Chicken uses to finance advertising programs.
Browns Chicken mandates that franchisees participate in a Bank Draft Plan for all payments, including royalty fees and Advertising Fund contributions. This plan requires franchisees to authorize Browns Chicken to withdraw funds from their designated bank account. Franchisees must also obtain written approval from Browns Chicken before making any changes to their banking relationships or account numbers. Failure to comply with these payment terms may result in penalties, such as processing fees for declined electronic bank drafts, and could potentially lead to the termination of the franchise agreement.