factual

Is the monthly Brand Fund Contribution to Buff City Soap refundable?

Buff_City_Soap Franchise · 2025 FDD

Answer from 2025 FDD Document

If the Brand Fund is terminated, all unspent monies on the date of termination accrued will be distributed to franchisees operating a Buff City Soap makery in proportion to their respective contributions to the Brand Fund accrued during the preceding three-month period.

Source: Item 23 — Receipts (FDD pages 69–186)

What This Means (2025 FDD)

According to the 2025 Buff City Soap Franchise Disclosure Document, the Brand Fund contributions are generally not refundable, with one specific exception. Buff City Soap administers a Brand Fund used for marketing, advertising, and related programs to promote the brand. Franchisees are required to contribute to this fund, and the amount is detailed in Section 4(c) of the Franchise Agreement. While Buff City Soap may increase the Brand Fund contribution with 60 days' notice, the increase cannot exceed 4%.

However, if Buff City Soap terminates the Brand Fund, any unspent monies accrued up to the termination date will be distributed to franchisees. The distribution will be proportional to each franchisee's contributions to the Brand Fund during the three-month period preceding the termination date. This is the only circumstance described where a franchisee would receive a portion of their Brand Fund contributions back.

It's important to note that Buff City Soap's Brand Fund is operated as a conduit for collecting and expending contributions. Buff City Soap does not act as a trustee and has no fiduciary duty to franchisees regarding the Brand Fund's operation. Interest earned on the Brand Fund will be used to pay advertising costs before using other assets of the fund. Franchisees can request a copy of the unaudited annual statement of monies collected and costs incurred by the Brand Fund, but no more than once per year.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.