How often is the System Advertising contribution for a Burros Fries franchise paid?
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 the 2024 Burros Fries Franchise Disclosure Document, franchisees are required to make System Advertising contributions on a monthly basis. These contributions are calculated as one to three percent (1%-3%) of Gross Revenues per calendar month. Payments are due by the fifth (5th) day of the month for the prior month's revenues. This payment schedule begins as soon as the Burros Fries business opens and continues for the duration of the franchise term.
The System Advertising contribution is used to support ongoing technology, new product development, and national advertising efforts that benefit all franchised businesses. While the contribution rate starts at one percent (1%) per year when the program is established, Burros Fries retains the right to increase or discontinue the contribution, with increases capped at 1% per year with 90 days' written notice. However, the total contribution will not exceed three percent (3%) of Gross Revenue in any calendar year.
Prospective Burros Fries franchisees should be aware of this ongoing monthly expense and factor it into their financial projections. It is also important to note that franchisees are required to spend at least $500 per calendar month on local advertising and promotion, in addition to the System Advertising Fee contribution. This combined advertising expenditure ensures a consistent and sustained marketing effort for the Burros Fries brand at both the national and local levels.