Where can I find information about the system advertising fee for a Burros Fries franchise in the FDD?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
The System Advertising Fee is to be received by us on or before the fifth (5th) day of each month for the prior month's Gross Revenue (as defined above in Section 10.A). This fee will be deposited into our System Advertising Account (the "Fund") for ongoing technology or new product development (including recipes and menu items) or kitchen equipment development, and such national advertising or public relations programs as we, in our sole discretion, may deem appropriate to promote our mark. The Fund may also be used for local franchisee group advertising or marketing and Franchisee advisory council expenses; local, regional, national or international advertising or marketing; administration of advertising and marketing (including salaries, accounting, collection, legal and other costs), related expenses and any media (including media production costs) or agency costs. We will direct all such programs, and will have sole discretion over the creative concepts, materials, endorsements and media used in such programs, and the placement or allocation of such programs. We reserve the right to determine in our sole discretionthe composition of all geographic territories and market areas for the implementation and development of such programs. The Burros & Fries Restaurants owned by our affiliates may will contribute on the same basis to the Fund but are not required.
We may disclose the identity of vendors who pay promotional allowances to us upon request and only after Franchisee's signing an appropriate non-disclosure agreement. We have the right to spend that money as we determine. We are not obliged to spend more on advertising and marketing than the amount of the Fund. Any unspent balance in the Fund at the end of the year may be carried over to later years and used for the purposes described in this Agreement. Neither we nor any of our members has any fiduciary duty to the Franchisee regarding any System Advertising Fund.
Franchisee's failure to pay required System Advertising Fees is a material breach of this Agreement, subjecting Franchisee to all remedies at law and as set forth in this Agreement. We may remove Franchisee from advertising or marketing materials without notice if Franchisee fails to timely remit its System Advertising Fee.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, information regarding the system advertising fee can be found in Item 22, specifically in the section discussing contracts. The System Advertising Fee is paid by the franchisee to Burros Fries on or before the fifth day of each month, calculated from the prior month's Gross Revenue.
The funds collected are deposited into the System Advertising Account, which Burros Fries uses for various purposes, including technology and new product development, kitchen equipment development, and national advertising or public relations programs. Burros Fries has sole discretion over these programs, including creative concepts, materials, and media used. The funds may also be used for local franchisee group advertising, Franchisee advisory council expenses, and the administration of advertising and marketing.
Burros Fries' affiliated restaurants may contribute to the fund on the same basis, but are not required to do so. Franchisees should note that Burros Fries is not obliged to spend more on advertising and marketing than the amount in the Fund, and any unspent balance may be carried over to later years. Neither Burros Fries nor its members have any fiduciary duty to the franchisee regarding the System Advertising Fund. Failure to pay the System Advertising Fees constitutes a material breach of the Franchise Agreement, potentially leading to remedies at law and removal from advertising or marketing materials.