Under what conditions can Buff City Soap increase the Brand Fund Contribution?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
We have established a Brand Fund into which you will contribute a monthly Brand Fund Contribution of 2% of the Net Sales of your Franchised Business during the preceding month.
Brand Fund Contributions will be made concurrently with Royalty Fee and Technology Fee payments.
We reserve the right to increase the Brand Fund Contribution upon 60 days' written notice to you, but the Brand Fund Contribution, when combined with the Local Marketing Expenditure requirement, will not exceed 4% of Net Sales for the initial term of your Franchise Agreement.
You must also spend at least 1% of Net Sales on Local Marketing Expenditures.
Source: Item 5 — INITIAL FEES (FDD pages 15–23)
What This Means (2025 FDD)
According to Buff City Soap's 2025 Franchise Disclosure Document, the company reserves the right to increase the Brand Fund Contribution under specific conditions. Currently, franchisees contribute 2% of their Net Sales to the Brand Fund monthly. Buff City Soap can increase this contribution, but they must provide franchisees with 60 days' written notice before the change takes effect.
However, there's a limit to how much Buff City Soap can raise the Brand Fund Contribution. The FDD states that the combined total of the Brand Fund Contribution and the Local Marketing Expenditure requirement cannot exceed 4% of Net Sales during the initial term of the Franchise Agreement. Since franchisees are already required to spend at least 1% of Net Sales on Local Marketing Expenditures, the Brand Fund Contribution could potentially be increased up to 3% of Net Sales, but the combined total cannot exceed 4%.
This condition provides some financial predictability for franchisees. While Buff City Soap retains the flexibility to adjust the Brand Fund Contribution, the 4% cap ensures that franchisees won't face unexpectedly high marketing-related expenses during their initial 10-year franchise term. This allows franchisees to better manage their budgets and plan for marketing investments.