How should C3 Wellness Spa franchisees pay the Brand Development Fund Fee?
C3_Wellness_Spa Franchise · 2024 FDDAnswer from 2024 FDD Document
r is not required to conduct any marketing on behalf of Franchisee or the System.
9.A. BRAND DEVELOPMENT FUND
At all times and from time to time, as determined by Franchisor, in Franchisor's Reasonable Business Judgment, Franchisor may institute, implement, maintain, delegate and administer a brand development fund (the "Brand Development Fund"). The following shall apply to the Brand Development Fund at all times throughout the Term:
- (1) If Franchisor institutes the Brand Development Fund, Franchisee shall pay, on the Due Date, a mandatory and continuing fee to the Brand Development Fund in an amount equal to a percentage of Gross Sales (as determined and designated by Franchisor in Franchisor's Reasonable Business Judgment) for each weekly Accounting Period (the "Brand Development Fund Fee"), provided, however, Franchisee will not be required to contribute more than the lesser of: (i) 3% of the Gross Sales of the Franchised Business; or (ii) $2,300 for each weekly Accounting Period;
- (2) Franchisor will provide Franchisee with written notice of the percentage of Gross Sales that Franchisee is required to contribute to the Brand Development Fund. Upon such written notice to Franchisee, the percentage of Gross Sales to be paid by Franchisee to the Brand Development Fund will be applicable for each and every weekly Accounting Period thereafter during the Term until otherwise designated by Franchisor in writing. The Brand Development Fund Fee shall be paid to Franchisor on the Due Date and in accordance with the payment terms and methods set forth in Article 5.B for the payment of Royalty Fees;
- (3) Franchisor, in Franchisor's Reasonable Business Judgment, shall direct all advertising, media placement, marketing and public relations programs and activities financed by the Brand Development Fund, with sole discretion over the strategic direction, creative concepts, materials, and endorsements used by the Brand Development Fund, and the geographic, market, and media placement and allocation thereof.
Source: Item 23 — RECEIPTS (FDD pages 59–293)
What This Means (2024 FDD)
According to C3 Wellness Spa's 2024 Franchise Disclosure Document, if C3 Wellness Spa institutes a Brand Development Fund, franchisees must pay a mandatory and continuing fee. This Brand Development Fund Fee is a percentage of Gross Sales, determined and designated by C3 Wellness Spa. However, the franchisee will not be required to contribute more than the lesser of: (i) 3% of the Gross Sales of the Franchised Business; or (ii) $2,300 for each weekly Accounting Period.
C3 Wellness Spa will provide written notice to the franchisee of the percentage of Gross Sales that the franchisee is required to contribute to the Brand Development Fund. This percentage will be applicable for each weekly Accounting Period until otherwise designated in writing by C3 Wellness Spa. The Brand Development Fund Fee must be paid to C3 Wellness Spa on the Due Date, following the payment terms and methods outlined in Article 5.B for Royalty Fees.
It's important to note that C3 Wellness Spa has the discretion to direct all advertising, media placement, marketing, and public relations programs financed by the Brand Development Fund. The fund may also be used for evaluating and monitoring Business Management Systems, maintaining and upgrading the System Website, and developing Digital Media. Franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Development Fund.