What is included in 'Marketing Expenses' for a Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
ger salaries; hourly wages for shift managers and Restaurant employees; payroll taxes; and vacation pay for Restaurant employees.
- "Marketing Expenses" means all costs and expenses incurred for internal and external advertis
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 45–48)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, 'Marketing Expenses' encompass all costs associated with advertising, marketing, and promotional activities, both internal and external. This includes expenses related to integrating the menu into the customer experience.
For the company-owned restaurant in Polaris, Ohio, marketing expenses totaled $44,597, representing 2.5% of gross sales, which were $1,783,883. The FDD also discusses a Local Advertising Commitment (LAC), where franchisees must spend a minimum amount on local advertising and marketing. This is 8% of gross sales for the first year and 3% for subsequent years.
Notably, the company-owned restaurant in Polaris, Ohio, did not pay brand fund fees during the measuring period. However, for the purposes of calculating imputed fees and costs, the franchisor applied the highest brand fund fee rate of 1.5% of gross sales. Additionally, the franchisor included the additional marketing expenses the qualifying restaurant would have incurred if it was a franchised restaurant, which amounted to $8,919. This was calculated as the difference between 3% of gross sales ($53,516) and the actual marketing expenses incurred by the restaurant ($44,597).