How much can Chop5 Salad Kitchen increase the required expenditures for local advertising?

Question

Accepted Answer

| 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%. |

Source: Item 6 — OTHER FEES (FDD pages 12–17)

How much can Chop5 Salad Kitchen increase the required expenditures for local advertising?

Answer from 2024 FDD Document

What This Means (2024 FDD)

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%.