Is a Burros Fries franchisee required to participate in advertising and promotional programs?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
more than 1% upon 90 days' written notice to you and shall not exceed 3% of Gross Revenue per month for the term of the Franchise Agreement.
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.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, franchisees are required to pay a System Advertising Fee. This fee is collected by Burros Fries on or before the fifth day of each month, based on the prior month's Gross Revenue. The funds are deposited into the System Advertising Account, which Burros Fries uses for technology development, new product development, kitchen equipment development, and national advertising or public relations programs.
The System Advertising Fund can also be used for local franchisee group advertising or marketing, Franchisee advisory council expenses, local, regional, national, or international advertising or marketing, and the administration of advertising and marketing. Burros Fries maintains sole discretion over these programs, including creative concepts, materials, endorsements, and media used. While Burros & Fries Restaurants owned by affiliates may contribute to the Fund, they are not required to do so.
Failure to pay the System Advertising Fees constitutes a material breach of the Franchise Agreement, potentially leading to legal remedies. Burros Fries may also remove a franchisee from advertising or marketing materials if they fail to remit the System Advertising Fee on time. This indicates that participation, through the payment of fees, is mandatory for franchisees to benefit from advertising and marketing efforts.