For what purposes can the System Advertising Fund be used by Burros Fries?
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.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries's 2024 Franchise Disclosure Document, the System Advertising Fund is used for several purposes related to advertising, marketing, and development. The funds are used for ongoing technology or new product development, including recipes and menu items, kitchen equipment development, and national advertising or public relations programs. Burros Fries has sole discretion in determining what is appropriate to promote their mark.
The fund can also be used for local franchisee group advertising or marketing and Franchisee advisory council expenses. It can be used for local, regional, national, or international advertising or marketing, as well as the administration of advertising and marketing, including salaries, accounting, collection, legal, and other costs. The fund can also cover related expenses and any media, including media production costs, or agency costs.
Burros Fries directs all programs and has sole discretion over the creative concepts, materials, endorsements, and media used in such programs, including the placement or allocation of such programs. Burros Fries also reserves the right to determine the composition of all geographic territories and market areas for the implementation and development of such programs. Burros Fries Restaurants owned by affiliates may contribute to the Fund on the same basis but are not required to do so. 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 the Franchise Agreement. Neither Burros Fries nor any of its members has any fiduciary duty to the Franchisee regarding any System Advertising Fund.