How often can Burros Fries increase the System Advertising Fee?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee will pay a System Advertising Fee equal to one percent (1%) to three percent (3%) of Gross Revenues per calendar month to be paid in the same manner as the royalty obligation that begins immediately once the Business is open for operation and continues for the term of the Agreement (as defined in Section 10.A). The System Advertising Fee will commence at one percent (1%) and can be increased by us annually by no 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.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the System Advertising Fee, which franchisees pay, is between 1% and 3% of gross revenues each month. Burros Fries can increase this fee annually, but the increase is capped at 1% each time they do so.
Burros Fries must provide franchisees with 90 days' written notice before increasing the System Advertising Fee. This advance notice allows franchisees time to prepare for the change in expenses. The agreement specifies that the advertising fee will not exceed 3% of gross revenue per month during the term of the Franchise Agreement, providing a limit to how much the fee can increase over time.
The System Advertising Fee is used for technology or new product development, national advertising, and public relations programs to promote the Burros Fries brand. The fund may also cover local franchisee group advertising, marketing, franchisee advisory council expenses, and the administration of advertising and marketing efforts. This comprehensive use of the advertising fund suggests that franchisees' contributions are invested in various strategies to support and grow the Burros Fries brand and business.