What is the maximum amount the Brand Fund Fee can be increased by Chop5 Salad Kitchen?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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%. |
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 Fee can be increased by up to 4% with 180 days' prior notice. The Brand Fund is administered by Chop5 Salad Kitchen, and franchisees have no voting rights pertaining to its administration, advertising creation, or the amount of the fee.
The Brand Fund Fee varies depending on the year. In the first year, it is 0.5% of Gross Sales, in the second year it is 1.0% of Gross Sales, and for the remainder of the term, it is 1.5% of Gross Sales. This fee is paid at the same time as the royalty fee.
It's important to note that the maximum total amount Chop5 Salad Kitchen may charge for the Brand Fund Fee, Local Advertising Commitment, and Cooperative Advertising Fee is capped at 8.5% of Gross Sales. This means that even if the Brand Fund Fee is increased, the total of these three fees cannot exceed this percentage. The Local Advertising Commitment is 8.0% of Gross Sales in the first year and 3.0% of Gross Sales for the rest of the term. The Cooperative Advertising Fee is set by the cooperative, but cannot exceed the Local Advertising Commitment.