What is the purpose of the Brand Fund for Buff City Soap?
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.
We may spend on behalf of the Brand Fund, in any fiscal year, an amount that is greater or less than the aggregate contribution of all BCS Makeries to the Brand Fund in that year, and the Brand Fund may borrow from us or others to cover deficits or may invest any surplus for future use. Any monies in the Brand Fund not spent at the end of each fiscal year will remain in the Brand Fund, provided that amounts contributed to the Brand Fund may be used to pay taxes associated with unspent amounts on deposit in the Brand Fund. We will have the sole and exclusive discretion to direct all activities and programs funded by the Brand Fund. The Brand Fund will not be separately audited. We will, upon your written request (but not more than once annually), provide a copy of our unaudited annual statement of monies collected and costs incurred by the Brand Fund. We have no obligation to ensure that Brand Fund expenditures in or affecting any geographic area are proportionate or equivalent to the Brand Fund Contributions made by franchised BCS Makeries in that geographic area, nor are we obligated to ensure that your Makery or any other BCS Makery will benefit directly or in proportion to your or its Brand Fund contribution, or that all BCS Makeries operated by us or any of our affiliates will pay the same Brand Fund Contribution. As of the issuance date of this disclosure document, the BCS Makeries operated by us and/or our affiliates do not contribute to the Brand Fund. We may terminate and reinstate the Brand Fund at any time. If the Brand Fund is terminated, all unspent monies will be distributed to f
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, the Brand Fund is established and administered by the franchisor for the creation and development of marketing, advertising, and related programs, campaigns, and materials. All franchisees must contribute to the Brand Fund, with a weekly contribution of two percent (2%) of the Net Sales of the Franchised Business for the preceding week. The Brand Fund is intended to direct all initiatives relating to the positioning of the Buff City Soap brand. The franchisor accounts for all Brand Fund Contributions in a separate account and will not use the Brand Fund to defray any of their general operating expenses, except for reasonable salaries, administrative costs, travel expenses, and overhead related to the administration of the Brand Fund and its programs.
The Brand Fund may be used to cover a wide array of marketing and advertising costs, including research, agency services, market research, creation and production of advertising materials, administration of advertising programs, product and customer research, promotional events, online and social media advertising, community relations, website maintenance, and other promotional activities deemed appropriate by Buff City Soap. Franchisees are responsible for the costs associated with the placement of marketing and media for their Makery, either by reimbursing the franchisor or directly paying a third-party advertiser. The Brand Fund will provide samples of advertising and marketing materials at no additional cost when deemed appropriate, with multiple copies available at the franchisee's cost plus related charges. Buff City Soap retains the option to increase the Brand Fund Contribution with 60 days' prior notice, subject to limitations on local marketing expenditures.
Buff City Soap may spend more or less than the aggregate contributions to the Brand Fund in any fiscal year, and the Brand Fund may borrow or invest funds to cover deficits or surpluses. Unspent monies at the end of each fiscal year remain in the Brand Fund, although they may be used to pay taxes associated with unspent amounts. Buff City Soap has sole discretion over the activities and programs funded by the Brand Fund, which is not separately audited. Franchisees can request a copy of the unaudited annual statement of monies collected and costs incurred by the Brand Fund, but not more than once annually. The franchisor is not obligated to ensure that Brand Fund expenditures are proportionate to contributions from franchised locations in any geographic area, nor is there an obligation to ensure direct benefits in proportion to contributions. As of the issuance date of the disclosure document, the BCS Makeries operated by Buff City Soap and/or its affiliates do not contribute to the Brand Fund. The franchisor may terminate and reinstate the Brand Fund at any time, and upon termination, 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. This substantial contribution underscores the importance of the Brand Fund in Buff City Soap's overall marketing strategy. Prospective franchisees should carefully consider the implications of these Brand Fund contributions and expenditures, as they represent a significant ongoing cost of operating a Buff City Soap franchise. Understanding how these funds are managed and allocated is crucial for assessing the potential return on investment and the overall value of the franchise opportunity.