Has Chop5 Salad Kitchen established the Brand Fund as of the FDD issuance date?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Definitions: As used in this Disclosure Document, the following capitalized terms have the meanings given to them below:
- "Brand Fund" means the brand and system development fund that we intend to administer to promote public recognition of our brand and improve our System. We have not established the Brand Fund as of the issuance date of this Disclosure Document.
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 had not yet been established as of the issuance date of the 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.
While the Brand Fund was not yet established, Chop5 Salad Kitchen franchisees are required to contribute to a Brand Fund Fee. During the first year, the Brand Fund Fee is 0.5% of Gross Sales, increasing to 1.0% in the second year, and 1.5% for the remainder of the term. These fees are due at the same time as the royalty fee. Chop5 Salad Kitchen retains the right to increase the Brand Fund Fee by up to 4% with 180 days' prior notice.
The maximum total amount that Chop5 Salad Kitchen may charge at any given time for the Brand Fund Fee, Local Advertising Commitment, and Cooperative Advertising Fee is capped at 8.5% of Gross Sales. Franchisees 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.