What is the 'Brand Fund' for Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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| TYPE OF FEE 1 | AMOUNT 2, 3 | DUE DATE | REMARKS |
|---|---|---|---|
| Brand Fund Fee | [1st Year] 0.5% of Gross Sales [2nd Year] 1.0% of Gross Sales [Rest of Term] 1.5% of Gross Sales | Same as royalty fee | You must contribute this amount to the Brand Fund we administer. You have no voting rights pertaining to the administration of the Brand Fund, the creation or placement of advertising, or the amount of the brand fund fee. We may increase the brand fund fee by up to 4% on 180 days' prior notice. The maximum total amount we may charge at any given time for the brand fund fee, Local Advertising Commitment and Cooperative Advertising Fee is capped at 8.5%. |
| Local Advertising | [1st Year] 8.0% of Gross Sales | Monthly, as incurred | This is the minimum amount you must spend on advertising and marketing in your local market to promote your Restaurant. This expenditure is in addition to your brand fund fee. We may increase the required expenditures by up to 2% |
| Commitment | [Rest of Term] 3.0% of Gross Sales | on 180 days' prior notice. The maximum total amount we may charge at any given time for the brand fund fee, Local Advertising Commitment and Cooperative Advertising Fee is capped at 8.5%. | |
| Cooperative Advertising Fee | Amount set by cooperative (not to exceed Local Advertising Commitment) | Same as royalty fee | See Note 4. |
| Training Fee | Up to $500 per person per day (plus Travel Expenses for onsite training) | 10 days after invoice | Payable for each person who attends: (a) initial training after you open (new Operating Partner or manager); (b) repeat training (after failing a prior attempt); (c) refresher or supplemental training; (d) remedial training; or (e) additional training you request. You must also reimburse us for Travel Expenses we incur for training onsite at your Restaurant. |
| Conference Registration Fee | Up to $1,000 per person per conference (currently $300 per person per conference) | 10 days after invoice | We may hold conferences to discuss matters affecting franchisees. Attendance is mandatory unless: (a) we designate attendance as optional; or (b) we waive your obligation to attend based on showing of good cause. |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, the Brand Fund is defined as the brand and system development fund that Chop5 Salad Kitchen intends to administer to promote public recognition of their brand and improve their System. As of the issuance date of the 2024 Disclosure Document, Chop5 Salad Kitchen had not yet established the Brand Fund. Franchisees are required to contribute to this fund, with the amount varying based on the year of operation.
The Brand Fund fee is 0.5% of Gross Sales for the first year, 1.0% of Gross Sales for the second year, and 1.5% of Gross Sales for the remainder of the franchise term. This fee is due at the same time as the royalty fee. While franchisees are required to contribute to the Brand Fund, they do not have any voting rights regarding its administration, the creation or placement of advertising, or the amount of the Brand Fund fee.
Chop5 Salad Kitchen retains the right to increase the Brand Fund fee by up to 4% with 180 days' prior notice. However, the total amount charged for the Brand Fund fee, Local Advertising Commitment, and Cooperative Advertising Fee is capped at 8.5% of Gross Sales. This cap provides some assurance to franchisees regarding the maximum advertising-related fees they may be required to pay. Liquidated damages payable by the franchisee to Chop5 Salad Kitchen includes average weekly brand fund fees imposed during the 52-week period preceding termination.