Is Chicken Guy required to spend advertising monies equivalent or proportionate to a franchisee's contribution?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Company-operated Restaurants contribute to the various advertising funds and cooperatives an amount equivalent to that contributed by comparable franchised Chicken Guy! Restaurants. In spending advertising monies, we are not obligated to make expenditures for any franchisee that are equivalent or proportionate to that franchisee's contribution or to ensure that any particular franchisee benefits directly or on a pro rata basis from expenditure of the funds. We are not required to spend any amount on advertising in the area where your Franchised Restaurant is located.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 25–34)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy is not obligated to ensure that advertising expenditures for a franchisee are equivalent or proportionate to that franchisee's contribution to the advertising funds. Chicken Guy also does not have to ensure that any franchisee benefits directly or on a pro rata basis from the expenditure of these funds. Furthermore, Chicken Guy is not required to spend any amount on advertising in the specific area where a franchisee's restaurant is located. Company-operated restaurants contribute to the advertising funds an amount equivalent to franchised Chicken Guy restaurants.
Chicken Guy has the sole discretion to use the Brand Fund monies for any purpose that it believes will enhance, protect, and increase public recognition of the Chicken Guy system and its trademarks. Chicken Guy also maintains sole control over the creative concepts, materials, and endorsements used in advertising programs, including their geographic, market, and media placement.
Franchisees are required to participate in all advertising, marketing, promotions, research, and public relations programs instituted by the Brand Fund. Franchisees must contribute to the Brand Fund 2% of weekly gross sales, up to a maximum annual contribution of $30,000. This contribution is part of the franchisee's Weekly Marketing Obligation, which will not exceed 5% of the Gross Sales of the Franchised Restaurant. Currently, the Weekly Marketing Obligation is 4% of gross sales, all of which is allocated to Local Store Marketing.
Chicken Guy may establish Regional Advertising Funds or Regional Co-ops, in which case franchisees will be obligated to contribute as directed. If a Regional Co-op is established, the monies may be spent for purposes determined by a majority vote of the Chicken Guy restaurants in the co-op. If the members cannot agree on how to spend the funds, Chicken Guy may assume decision-making authority after providing ten days' written notice.