Does Buns On Fire have discretion in administering the Marketing Fund?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
We administer and maintain a Proprietary Marketing Fund (the "Marketing Fund") for national and global advertising programs with monies collected from franchisees and corporate stores. We will determine, in our sole discretion, when, how and where the payments deposited into the Marketing Fund will be spent. We select the types of media used and the location of the advertising campaigns administered through the Marketing Fund. We use or may use the following media: print, radio, television, telephone, smart phone, social media and Internet. We may also use the funds for general public relations and to otherwise obtain and build brand awareness. The focus is on national and international coverage and marketing development and will be handled in-house or outsourced to a professional advertising or public relations firm. We will not receive any compensation for providing services to the Marketing Fund, other than the reimbursement of ordinary and necessary expenses, which may include in-house staff.
You must contribute one percent (1%) of your Gross Sales to the Marketing Fund. All franchisees and franchisor-owned operations will contribute on the same pro rata basis. At your request, we will make available to you an annual unaudited financial statement of the Marketing Fund. As we have just commenced franchising efforts, we have no prior year's allocation of expenditures to disclose.
We are not obligated to spend any amount of the Marketing Fund on marketing in your specific area. Any unspent amounts in the Marketing Fund will be saved for later spending. No percentage of the Marketing Fund will be used for the solicitation of franchisees; however, our advertising and marketing material may contain contact numbers for obtaining information about Buns on Fire Restaurant franchises.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–33)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, Buns On Fire has sole discretion in determining how the Marketing Fund is spent. The document states that Buns On Fire will decide when, how, and where the payments deposited into the Marketing Fund will be used. This fund is supported by contributions from both franchisees and corporate stores.
Buns On Fire is responsible for selecting the types of media and the locations for advertising campaigns that are administered through the Marketing Fund. These media options include print, radio, television, telephone, smart phones, social media, and the Internet. The funds may also be used for general public relations and to build brand awareness on a national and international level.
Franchisees are required to contribute one percent of their gross sales to the Marketing Fund, with all franchisees and franchisor-owned operations contributing on the same pro rata basis. While franchisees can request an annual unaudited financial statement of the Marketing Fund, Buns On Fire is not obligated to spend any specific amount in the franchisee's particular area. Any unspent amounts in the Marketing Fund will be saved for future use. It is important to note that no percentage of the Marketing Fund will be used for soliciting new franchisees, although advertising materials may contain contact information for franchise inquiries.