By what day of the month are System Advertising contributions due to Burros Fries?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
- (i.) You will pay us one to three percent (1%-3%) of Gross Revenues per calendar month for the System Advertising contribution, paid to us, as designated in the Franchise Agreement.
We may raise, discontinue or reduce the contribution but the increase will not exceed 1% per year upon 90 days' written notice to you and shall not exceed 3% of Gross Revenue per month but your total contribution will not exceed three percent (3%) of your Gross Revenue in any calendar year for the term of the Agreement.
You will begin at one percent (1%) per year if and when the program is established.
Contributions are due by the fifth (5th) day of the month (for the prior month) which will start immediately once your Business is open for operation then continues for the term of your Franchise (as described in Item 6).
Refer to Item 6 for definition of Gross Revenue.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 27–38)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are required to make System Advertising contributions by the fifth day of each month. This payment covers the prior month's activity. This obligation begins as soon as the Burros Fries business opens and continues for the entire term of the Franchise Agreement.
The System Advertising contribution is a percentage of the Gross Revenues, specifically one to three percent. The contribution starts at one percent annually when the program is established. Burros Fries retains the right to adjust this contribution, but increases are capped at 1% per year with a 90-day written notice to the franchisee. The total contribution will not exceed three percent of Gross Revenue in any calendar year.
These funds are earmarked for the System Advertising Fund and are to be used for technology development, new product development, and national advertising efforts. While the funds are managed by Burros Fries, they are accounted for separately and are not intended to cover general operating expenses, except for reasonable costs associated with administering the Fund and its programs. This includes salaries, administrative costs, travel, and overhead related to activities such as product evaluation, market research, and the creation of advertising materials.
In addition to the System Advertising Fee, Burros Fries also requires franchisees to spend a minimum of $500 per month on local advertising and promotion, with a recommendation to spend up to $1,500 per month. Franchisees must report these local advertising expenditures to Burros Fries by the fifth day after the end of each quarter, using the forms and methods specified by the company.