Is there a maximum brand fund fee that Chop5 Salad Kitchen may charge?
Chop5_Salad_Kitchen Franchise · 2024 FDDAnswer from 2024 FDD Document
authorizing the execution of this Agreement, a copy of the Franchisee Entity's organizational documents and a current Certificate of Good Standing (or the functional equivalent thereof). All Owners of the Franchisee Entity and their spouses must sign a Franchise Owner Agreement.
10. ADVERTISING & MARKETING.
10.1. Brand and System Development Fund. We will establish and administer a brand and system development fund to promote public awareness of our brand and improve our System. On each royalty payment due date, you must pay us a brand fund fee in the amount we designate from time to time. The table below identifies the currently imposed brand fund fee and the maximum brand fund fee we may charge. We will provide you with at least 180 days' notice before we implement any increase to the brand fund fee.
| DEVELOPMENT PERIOD ENDING | NUMBER OF RESTAURANTS OPENED DURING DEVELOPMENT PERIOD | CUMULATIVE NUMBER OF | |---|---|---| | | | RESTAURANTS OPENED AND IN OPERATION | | 1 year after Effective Date | | | | 2 years after Effective Date | | | | 3 years after Effective Date | | | | 4 years after Effective Date | | | | 5 years after Effective Date | | | | 6 years after Effective Date | | | | 7 years after Effective Date | | | | 8 years after Effective Date | | | | 9 years after Effective Date | | | | 10 years after Effective Date | | | | Total Number of Restaurants to be Developed: | | | We may use the fund to pay for any of the following in our sole discretion:
- (i) developing, maintaining, admini
Source: Item 23 — RECEIPT (FDD pages 50–178)
What This Means (2024 FDD)
According to Chop5 Salad Kitchen's 2024 Franchise Disclosure Document, Chop5 Salad Kitchen will establish and administer a brand and system development fund to promote public awareness of their brand and improve their system. On each royalty payment due date, franchisees must pay a brand fund fee in the amount Chop5 Salad Kitchen designates from time to time. Chop5 Salad Kitchen will provide at least 180 days' notice before implementing any increase to the brand fund fee. The table in Item 6 identifies the currently imposed brand fund fee and the maximum brand fund fee Chop5 Salad Kitchen may charge.
In addition to brand fund fees, franchisees must spend a minimum amount of money that Chop5 Salad Kitchen requires on approved local advertising and marketing to promote their restaurant in their local market, called the "Local Advertising Commitment." Chop5 Salad Kitchen will provide franchisees with at least 180 days' notice before they implement any increase to the Local Advertising Commitment.
However, the maximum total amount that Chop5 Salad Kitchen may charge a franchisee at any given time for brand fund fees, the Local Advertising Commitment, and Cooperative Advertising Fees, on a combined basis, is capped at 8.5% of Gross Sales.