How are Brand Fund Contributions for Buff City Soap accounted for?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
d below. We may use print, broadcast and on-line or electronic media, social media, direct mail and other promotional materials as funds permit. We will utilize a combination of in-house and advertising agency resources to produce advertising. We are not required to spend any amount on advertising in your Protected Area.
Brand Fund
We have established and administer a Brand Fund for the creation and development of marketing, advertising, and related programs, campaigns and materials (the "Brand Fund"). As of the issuance date of this disclosure document, all franchisees must pay us a weekly Brand Fund Contribution equal to two percent (2%) of the Net Sales of the Franchised Business for the preceding week. No franchisees contribute a different amount or a different rate. We will direct all initiatives relating to the positioning of the Brand using the Brand Fund. We will account for all Brand Fund Contributions we collect in a separate account. The Brand Fund will not be used to defray any of our general operating expenses, except for reasonable salaries, administrative costs, travel expenses, and overhead as we may incur in activities related to the administration of the Brand Fund and its programs. We may use the Brand Fund to pay the costs of research, agency of record services, market research, creation and production of video, audio, electronic, and written advertising and marketing programs; administration of regional, multi-regional, and national advertising and marketing programs, Product and customer research and surveys, and testing and related development activities; promotional events; purchasing and participating in online, Social Media, radio, television, and billboard advertising and programming; employing marketing, advertising and promotional agencies to assist therewith; conducting community relations activities; and supporting public relations, maintenance of the System websites, and online presence; and such other advertising, marketing, and promotional activities as we determine are appropriate for BCS Makeries and the Marks and System under which they operate. You will ultimately be responsible for the costs associated with the placement of any such marketing and media for the Makery in that you will either reimburse us for media and marketing placement or directly pay a third-party advertiser for placement of the media or marketing materials. The Brand Fund will furnish you with samples of advertising, marketing formats, promotional formats, and other materials at no additional cost when we consider it appropriate. Multiple copies of such materials will be provided to you at your cost plus any related shipping, handling, and storage charges. We may, at our sole option, increase the Brand Fund Contribution upon 60 days' prior notice to you, subject to the limitation stated under "Local Marketing" below.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 35–42)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, all franchisees must contribute to the Brand Fund, with the contribution being 2% of the Net Sales of the Franchised Business for the preceding week. Buff City Soap accounts for all Brand Fund contributions in a separate account. These funds are used for marketing, advertising, and related programs to promote the brand. The Brand Fund will not be used to cover Buff City Soap's general operating expenses, although reasonable salaries, administrative costs, travel expenses, and overhead related to administering the Brand Fund and its programs can be paid from the fund.
Buff City Soap has the sole discretion to direct all activities and programs funded by the Brand Fund. The Brand Fund may spend more or less than the aggregate contributions in any fiscal year and may borrow or invest surpluses. Any unspent monies at the end of each fiscal year will remain in the Brand Fund, but may be used to pay taxes associated with unspent amounts on deposit in the Brand Fund. The Brand Fund is not separately audited, but Buff City Soap will provide an unaudited annual statement of monies collected and costs incurred by the Brand Fund upon written request, but not more than once annually.
Notably, as of the issuance date of the 2025 disclosure document, Buff City Soap-operated locations do not contribute to the Brand Fund. Buff City Soap can terminate or reinstate the Brand Fund at any time. If terminated, unspent monies will be distributed to franchisees in proportion to their contributions during the preceding three-month period. In the fiscal year ended December 31, 2024, franchisees contributed a total of $2,696,326 to the Brand Fund.